Global ultra-luxury carmakers are pouring into India. The country that is home to almost half a billion of the world’s poorest citizens, as well as the largest national group of billionaires outside the US, has become the next key market for sports cars worth more than $1 million.
Aston Martin, the British luxury car manufacturer, is the latest to announce its entry into India’s coveted high-end car segment, signalling that the nation’s clan of über-rich has become too big to ignore.
“We think the market has now reached the necessary critical mass to make two local dealerships financially viable,” Bill Donnelly, Aston Martin’s global director, told the Financial Times.
Aston Martin, whose cars feature in James Bond films, joins Ferrari, Maserati and Bugatti, which have also announced plans to open a showroom in India, where the number of dollar millionaires reached 130,000 in 2010. At the same time an estimated 80 per cent of the population lives on less than $2 a day, according to the World Bank.
India sold 15,702 luxury cars last year, some way behind China, which sold 727,227 premium vehicles in the same period, according to research group IHS Global Insight.
Compared to China, the Indian market is only nascent, due to its poor highway networks, a 110 percent tax barrier on imported vehicles and because Chinese car demand suffered a lot less during the financial crisis, analysts said.
“In China, luxury car sales did extremely well even during the financial crisis,” said Mike Dunne, an Asia-based auto consultant. “It was as if they were untouched by the events in the US.”
But demand among India’s super-rich seems to confirm sports car makers’ enthusiasm for Asia’s third-largest economy.
“The market for luxury sports cars is still in its infancy in India, but growing at a rate which makes it very important for the future,” said Mr Donnelly.
India’s demand for luxury cars is growing at a rate of more than 30 per cent, considerably higher than that of normal hatchbacks, said Jatin Chawla, auto analyst at India Infoline in Mumbai.
“Compared to China the Indian market is small but [it] is catching up rapidly,” said Mr Chawla.
Julius Kruta, of Bugatti Automobiles, which will be selling the group’s classic Veyron 16.4 Grand Sport for $3.6 million in India, said the south Asian country was the latest frontier for luxury carmakers.
“India is the hub of luxury, the country of the erstwhile maharajas, who were the true patrons of bespoke luxury,” he said. “India, with its growing clan of billionaires and booming businesses, is a market that is hard to ignore.”
Simone Niccolai, Asia-Pacific managing director of Italy’s Maserati, which sold 5,675 cars globally in 2010, said that the Indian market had developed an appetite for luxury cars and planned to open seven dealerships in the country by 2015.
Lalit Choudary, an Aston Martin dealer, whose showroom in Mumbai is minutes away from the $1bn home of Indian tycoon Mukesh Ambani, said there was a new generation of millionaires who wanted to buy a luxury car to tell the world: “I’ve made it”.
“People in India want status and a car like [an] Aston Martin gives you exactly that,” said Mr Choudary, who plans to sell about 100 cars a year by 2015, including the collector’s model One-77, which will be on sale for $4.5 million.