The renowned luxury car brand is now eyeing the growing market in India. Aston Martin, which sold approximately 6,400 cars worldwide last year, aims to expand its presence in India both in terms of retail and its model lineup. The company plans to launch its electric vehicle in India by 2025. Gregory Adams, Asia president of Aston Martin, introduced the DB12 coupe with a price tag of Rs 4.6 crore (ex-showroom Delhi) last week, signaling the brand’s commitment to the Indian market.
Currently, Aston Martin sells around 10-15 units in India annually. The company plans to revamp its sports car lineup and introduce hybrid supercars like the Valhalla, as well as SUVs. Adams believes that the Indian market holds great potential due to the increasing number of affluent individuals who have the means and the desire to invest in luxury brands.
The Attraction of the Indian Market
Aston Martin sees India as a thriving market, especially as developed countries struggle with economic challenges. The brand believes that India offers immense opportunities to sell more cars to the growing number of affluent Indians who are willing to splurge on super luxury brands. While advanced economies like the US, Germany, and the UK face recessionary risks, India’s economy is projected to grow at a healthy pace. Furthermore, the number of rich individuals in India is on the rise.
According to a Knight Frank study, India’s billionaire population increased from 145 in 2021 to 161 in 2022, and is estimated to reach 195 by 2027. The number of ultra-high-net-worth individuals in India, with a net worth of over $30 million, is expected to grow by more than 58% in the next five years. The Indian high-net-worth individual (HNI) population, with assets worth USD 1 million or more, reached 7,97,714 in 2021 and is projected to reach 16,57,272 by 2027.
Aston Martin sees a significant customer base among these affluent Indians.
The Growing Super Luxury Car Market in India
India’s luxury car market is dominated by Italian sports carmaker Lamborghini, along with prestigious brands like Ferrari, Bentley, Porsche, and Maybach. Despite the global slowdown and concerns about a recession, the demand for luxury cars in India has continued to surge.
In 2022, sales of ultra-luxury cars (with a minimum price tag of Rs 2 crore) in India grew by 50%, breaking the previous record set in 2018. Buyers are now more willing to fulfill their dreams and aspirations, and the market for super-luxury cars is expected to reach 450 units, surpassing the previous high of 325 units sold in 2018.
Post-pandemic, there has been an unprecedented demand for luxury cars as people seek to enjoy life and indulge themselves. This trend is observed across various luxury brands, including Rolls-Royce, Ferrari, Lamborghini, BMW, and Aston Martin.
Top officials from luxury car retailers have also acknowledged the rising demand. Yadur Kapur, CEO of Select Cars, stated that the demand for luxury cars has skyrocketed post-pandemic. Satya Bagla, MD of Exclusive Motors, noted that people want to reward themselves with material possessions and embrace a lavish lifestyle.
Overall Growth of the Luxury Car Market
The luxury car segment in India has outperformed the overall automotive industry in terms of growth. In the first half of the current year, luxury vehicle sales grew at a strong double-digit rate, surpassing industry estimates. From January to June, approximately 20,000 luxury vehicles were sold in India, marking a 38% increase compared to the same period last year. This growth indicates India’s status as the fastest-growing major economy.
On the other hand, overall passenger vehicle sales rose by about 10% during the first half of 2023, significantly lower than the growth witnessed in the luxury car segment.
Taxation Challenges
High taxes pose a challenge for the super luxury car market in India. The taxes on these cars increase their prices, making them unaffordable for many wealthy individuals. Currently, India imposes a GST rate of 28% on automobiles, along with additional cess ranging between 1-22% based on the vehicle’s type. Fully imported cars attract customs duty of 60-100% depending on the engine size and cost. These taxes hamper the growth of the luxury car market in India despite the country having the third-largest number of billionaires globally.
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