Luxury car sales grow fastest in 5 years in India

Luxury car sales in India grew at its fastest clip since 2012 with a near 17 percent jump in sales in 2017 as German carmaker Mercedes Benz retained its crown at the top of the pile for the third straight year.

Mercedes registered sales of 15,300 units during the year, a growth of 16 percent over 2016 and was the only company to report five-digit sales for the year. Arch rival BMW reported a 24.6 percent growth at 9,800 units while Audi's tally was almost stagnant at 7,876 units.  

"Clocking more than 15,000 sales units is one of the many first-of-its kind achievements for Mercedes-Benz in the luxury car segment in India, and we are glad to achieve them and spearhead the industry, firmly," said Roland Folger, managing director and CEO, Mercedes Benz India.

Though the numbers suggest otherwise, the year was not a smooth sailing for the industry. While the first three months of the year were marred by the aftermath of the demonetization exercise of November 2016, the roll out of the GST in the middle of the year was a sweet-sour event for the sector. While initially, prices came down when GST on luxury cars were restricted to 43 percent in July, the imposition of cess two months later put paid to hopes of a bumper year.

"In principle, there is no doubt GST is a great step. It brings in uniform taxation that is simpler and makes doing business in the country easier," says Rahil Ansari, head, Audi India. "The frequent changes in taxes however did confuse the buyers. We initially passed on the entire benefit only to undo it a couple of months later. So initially we saw a lot of traction but it became a little more difficult later on."

With a slew of launches, 2018 promises to be an even better year. Audi will bring in a facelift of one of its largest selling SUVs--the Q5, later this month while Jaguar Land Rover will also launch its new  SUV--Velar. At the super luxury end, Lamborghini will also drive in its own SUV, the Urus.