Analysts believe that the premium luxury car segment of the India auto industry will report a negligible growth this year, at its slowest rate, against the data of last ten years. As per the Managing Director of BMW India, Andreas Schaaf, owing to the increase in the import rates, constant hike in the petrol prices and depreciation in the value of rupee, the growth in luxury car segment may not even attain a double-digit mark. All these aspects will keep the buyers at bay from taking the possession of new models, which will now cost dearly on their pockets.
When compared with the figures of last few years, the Compounded Annual Growth Rate (CAGR) of luxury segment remained over 30 per cent. However in the current scenario, the impact of the sluggish market is so aggressive that the German auto maker, who earlier had plans to introduce around four to six new cars in tenure of one year, has altered its plans and is now looking ahead for the same in 2012 and 2013.
Stating his secondary views on new BMW 3 Series sedan, Schaaf told ET, “It has been one of the toughest years for luxury car market in the country; first the series of petrol hikes followed by an increase in import duty for cars, then the steep fall in rupee - all this has made it difficult to price our products.”
In the initial phase of 2012, the Indian subsidiary of German auto giant, BMW declared that the company will target a growth of 30-40 per cent this year; however Schaaf has now stated that the anticipated growth would be mere 10 per cent only.
Speaking in favour of BMW, its country cousin Mercedes-Benz India’s Managing Director, Peter Honegg, quoted, “The market has slowed down dramatically and it has impacted luxury car sales and we expect a minimal growth from the segment this year.”
Indian auto industry, a 2.2 million car market, accounts for even less than 2 per cent share of luxury cars. Considering the growth in this segment in the first half of 2012, the sales figures stood at 12,000 units with an expansion of 9 per cent against 80 per cent growth registered in the corresponding period 2010 and 35-40 per cent growth recorded in 2011. Notably, the negative growth in the month of May is first in nearly 5-7 years that went by.
Analysts anticipate that the foreign car makers will experience not-so-good times in the Indian auto industry this year, however scenario might be favourable for a few.
