Even as the Covid-19 pandemic will result in luxury car sales declining in double digits this year, it has brought in new sets of customers, such as those buying luxury cars for inter-city travel, as well as more women buyers, said a top company official at Mercedes-Benz India, the country’s largest luxury car maker.

“The luxury car market is seeing new sets of customers (amid the pandemic). For example, there are a lot of customers buying cars for inter-city travel, like Delhi-Jaipur or, say, Bengaluru-Chennai,” said Santosh Iyer, Vice-President, Sales and Marketing, Mercedes-Benz India, told BusinessLine . “They used to travel by flight for their business interests, but now that flights are a riskier proposition — at least in consumer minds — they are actually opting for luxury cars to commute between cities. Now, this kind of a use case never existed pre-Covid. These are the new segments coming up.”

There has also been an increase in the number of women buyers of luxury cars amid the pandemic, though there is not much clarity on the reasons for it yet, Iyer added.

Iyer was speaking on the sidelines of the launch of the company’s all new performance SUV Coupé, the AMG GLE 53 4MATIC+ Coupé, priced at ₹1.2 crore (ex-showroom).

“There are some customers who are postponing their replacement demand or their purchases considering the economic situation, but there is also a new set of consumers who are coming to the luxury market for maybe a different (use) case altogether. Inter-city travel is growing big and more so because people want safe and luxurious cars for their 7-8 hours of drive,” Iyer explained.

However, the Indian luxury car market is bracing for a steep decline in 2020, estimated to be close to a 40 per cent year-on-year fall. While the mass automobile market saw a recovery post the lifting of the lockdown, the recovery was slow in the luxury market, Iyer pointed out.

“But now, we see a trend where customers are going for replacement purchases, they are also upgrading, and hopefully this should help us in the festival season also. And more so because of our new launches.” he said.

Optimistic

By October, Mercedes-Benz expects the demand to come back to pre-Covid levels due to the start of festivities and the issues around logistics clearing up, as well as the company’s new launches, said Iyer. If the company is able to achieve the same sales numbers in the last quarter of this calendar year as the previous year, it will be a good outcome, he noted.

During the ‘shradh’ period — which is considered an inauspicious time as per the Hindu calendar — the bookings were slow. But after it ended by mid-September, the bookings have seen an increase, which is also giving the company confidence that by October, it should be able to get back to the sales levels of the previous year.

Currently, the demand is at 60 per cent of pre-Covid levels, he said. Mercedes has also seen a 25 per cent month-on-month increase in sales post the lifting of the lockdown, said Iyer. A positive growth in the luxury car market may only happen in CY2021, he said.

While Mercedes is committed to almost all the product launches this year as per plans regardless of the impact of Covid-19, the A-Class Limousine and the GLA SUV, which were supposed to be launched during the festival season, may get shifted to December or even early next year, said Iyer. If these launches get delayed to next year, it could impact the company’s month-on-month or quarter-on-quarter sales comparisons, he said.

On what the government can do to help the sector, Iyer said that any tax reduction can help in the faster recovery of the automobile sector. Execution of infrastructure projects and roll-out of the scrappage policy will also help the industry, he said.

Related Topics
comment COMMENT NOW