In September this year, German luxury car maker Mercedes-Benz introduced the AMG G63 Grand Edition. This was an exclusive model with just 1,000 units to be produced worldwide. In India, only 25 units were on offer, priced at a steep Rs 4 crore ex-showroom. According to Santosh Iyer, the MD and CEO of Mercedes-Benz India, the moment the announcement was made, the India-allocated units were sold—in just six minutes.
It is that time of the year when the festive mood has just kicked in and companies are hoping to boost their sales. After Onam in Kerala and Ganesh Chaturthi in Maharashtra and a few other states, the auspicious period of Navratri kicks in from October 15, which will be followed by Diwali next month.
Top luxury car makers like Mercedes are already seeing strong sales. The company's sales in the January-September period were up 11 per cent from a year ago to 12,768 units. Importantly, top-end vehicles are accelerating at double the speed. Sales of vehicles priced around Rs 1.50 crore or more grew 22 per cent in the same period, according to Iyer. Top-end cars comprise 25 per ent of Mercedes' portfolio.
"We have a strong product portfolio including brands like S-Class, Maybach, EQS etc. There is desirability for the brand and the people are willing to pay the high price," he said.
Iyer pointed that out most of the top-end customers are multiple car owners, who may already have several Mercedes cars.
Mercedes is not the only luxury car maker seeing a strong uptick in demand. Rival Audi saw its sales in the first nine months of 2023 surpass sales clocked in the entire 2022 calendar year. Audi's sales in the January-September period surged 88 per cent to 5,530 units.
Overall, the luxury car industry is expected to have clocked around 16 per cent growth in the January-September period this year. The strong rebound in demand is a big relief for the luxury car industry, which had been in the slow lane since 2018-19.
"We have a strong economy at present and there is in general positive demand. There are a lot of aspirational buyers who we see today, wanting to move into the luxury space and there is sufficient liquidity in the market for people to buy," said Balbir Singh Dhillon, the head of Audi India.
In the wake of the of the Covid-19 pandemic over 2020-21, the automobile industry struggled with supply chain-related issues, especially in areas like semi-conductors. Given the huge amount of tech onboard, luxury car makers were hit hard. These issues are now easing out and therefore availability of models has also improved, noted Dhillon.
Mercedes' Iyer said while semi-conductor-related supply issues were behind, there were still challenges with respect to some of the tier II and tier III suppliers, which was hampering production and in turn driving up waiting periods.
"We still have some risks coming out of certain components and these risks are hitting us more on the SUV side of the business. The GLA, GLC and GLS, these carlines we are still facing challenges when it comes to supply of components and parts, and because of this, our production colleagues are not able to match up to the demand," he said.
Mercedes has already launched eight new products this year, and will launch two more before Diwali, Iyer informed.
Apart from launches, luxury automakers are also offering various experiences and events for their customers to keep up the mood and growth momentum.
Mercedes, for instance, has collaborated with the Nita Mukesh Ambani Cultural Centre in Mumbai to offer its customers exclusive experiences in art, culture, fashion and luxury.
