Luxury Car Battle India

The luxury car battle in India is heating up and leading the charge are three German companies – BMW, Audi and Mercedes-Benz. The German trio are known for developing technologically superior cars which offer high end technology coupled with an involving driving experience. Exactly the things which most Indian buyers don’t really care for. What Indian do really look for though, is a good back seat and brand image. Today, the luxury car market is just 20,000 units a year, but by 2020, this figure will become almost six times at 1.5 lakh units a year. Thus it makes every sense for these reputed car makers to go aggressive in the Indian car market.

Mercedes-Benz was the first mover. It entered India way back in 1994. The Stuttgart based company has enjoyed monopoly for a long long time, enough to make it complacent. BMW entered India in 2006 and was quick to bring its entire line-up of cars. People got bored of Mercedes cars and quickly hoped onto brand BMW. The Bavarian based company was quick to launch entry level variants to lure prospective buyers. Within a few years, BMW had taken the numero uno position away from Mercedes-Benz. In 2007, Audi officially entered India and soon became the fancy of Bollywood. The Q-range of SUVs captured the market and has since dominated it. The Ingolstadt based manufacturer benefits from stunning looking vehicles, which appeal to the youth.

Earlier this year, Audi pulled off a massive surprise on everyone. The company not only overtook Mercedes-Benz for number two position, but it also came close on the heals of BMW. Audi India head Michael Perschke is confident that the company will become the number one luxury car maker in India by 2014. Audi has launched the facelifted A4, Q3, TT and S4 this year and will launch the A8 L with a 4.2-litre diesel engine on the 3rd of August. The company does have a fantastic line-up of vehicles and slowly and steadily, is gaining ground in the luxury car market. The company’s quarter one sales of 1908 units is testimony to that. BMW sold 2088 units in the same period, while Mercedes managed to sell just 1257 units.

However BMW and Mercedes-Benz can’t be underestimated. While Mercedes-Benz is relying heavily on the MFA-platform, BMW is betting big on the latest 3-Series (F30) to bring in the volumes. When BMW explored the compact crossover segment with the X1, Audi was very quick in developing the Q3 and bringing it to the market. However Mercedes won’t have a competitor (GLA-Class) ready till 2014 and are instead bringing in the B-Class as a stop gap measure. Next year, Mercedes will bring in the A-Class, while the CLA-Class is expected to rival Audi’s A3. BMW too is developing a 1-Series sedan and sales in this segment will be really interesting to watch.

Mercedes-Benz launched the M-Class earlier this year, while the B-Class is the only other launch scheduled for 2012. BMW on the other end recently launched the new 3-Series and plans to bring in the facelifts of the X1, X6 and 7-Series along with the new 6-Series this year. This product onslaught will ensure BMW stays ahead but once Audi decides to unleash the A1 against the A-Class, A3 against the CLA-Class, there is not much what BMW can do. Where Mercedes has an advantage is dealership outlets but the other two are catching up quickly.

In this battle amongst the Axis forces, Jaguar and Volvo are slowly and steadily building up momentum. Both companies are planning local assembly, in order to reduce prices of their cars and battle the Germans head-on. Jaguar and Volvo are armed with competitive vehicles and are also developing compact vehicles to take the fight to the entry level machines offered by the German trio. Volvo has even confidently said, that by 2020, they will become number 3, which means one of the Germans will have to give up their place. Who is going to do that, it is very difficult to say. This battle in the luxury car space far from getting over anytime soon.