- 09 Jan 2023
- ICICIdirect Research
LUXURY CAR SEGMENT WITNESSES HEALTHY GROWTH
News: As per media sources, the luxury car market outpaced broader auto industry growth in CY22 and almost reached pre-pandemic levels. As per sources, ~37,000 luxury cars were sold domestically in CY22, which is up ~50% YoY vs. ~40,000 units clocked in CY18.
Views: The growth was mainly led by Mercedes Benz, which retained its leadership position in luxury car segment with sales in CY22 pegged at ~15,800 units, up 41% YoY and above the last peak of ~15,500 attained in CY18. This bodes well for luxury car dealers like Landmark Cars that is the largest dealer for Mercedes Benz India (accounted for ~16% of sales in FY22). BMW group sales in CY22 also came in robust at ~12,000 units, up 35% YoY, surpassing its previous peak. Also media sources indicate that cars priced >|1 crore growing exponentially and average age of buyers declining to 38 years from 45 years. EV penetration in this space is also seen higher at ~10-15% by the end of CY23 vs. mass market penetration at ~1%. With aggressive product launches in this space, it is well poised to clock double digit growth in CY23E.
Impact: Positive