Inflation seems to have a disproportionate impact on mere mortals – not the swish set from SoBo, for instance. A cursory glance at the sales charts of luxury carmakers amply demonstrates that prices are rarely a deterrent for those loaded with cash. The Indian market is firing on all cylinders for the likes of Mercedes to Lamborghini.
Mercedes expects record sales this year, while Volkswagen-owned Italian super-luxury car brand Lamborghini has almost sold out its entire 2022 allocation for India. BMW is eyeing double-digit growth and JLR, owned by the Tata Group, has reported record bookings for the year globally. To be sure, local bookings are already worth about half-a-billion dollars, totalling up to 10,000 units. And what’s more surprising is that the booking momentum remains strong despite the long waiting period – and multiple rounds of price increases. Vehicle prices have risen by at least ₹1 lakh to as high as ₹20 lakh.
“The pricing adjustments have been very well received and not dented demand,” Martin Schwenk, MD, Mercedes Benz India, told ET. “We sold over 4,000 cars in the first quarter of 2022; we are confident of sustaining the momentum for the rest of the year and ending with our highest ever annual sales this calendar year.”
The picture isn’t very different overseas even as prices of food, petrol, airfares, and hotel rooms are soaring at the fastest pace in decades.
US inflation has reached its highest in 40 years and inflation in Germany climbed to its highest since the formation of the EU. Vikram Pawah, president, BMW Group India, said in the Q1 of 2022, BMW Group India registered growth of 25% and the order pipeline for the next three months is heavy. It is sitting on an order book of 2,000 units for BMW cars, 200 units for MINI brand and there are 1,500 waiting customers for BMW Motorrad bikes.
“One thing is clear. Since the pandemic, there is also a greater realization among people to live life to the fullest and enjoy the best things. Personal mobility is on the rise,” said Pawah.
The head of BMW Group India believes that the luxury segment to a certain extent is not severely impacted by mild inflation changes.
However, the unpredictable socio-economic environment, the pandemic and high taxation may have an impact on consumer sentiment. More than demand, supply-side constraints stand in the way of even faster growth. “Things like lockdowns, logistical hurdles or semiconductor shortages present operational hurdles that have an impact on sales despite the high market demand,” added Pawah.