Luxury Car Market Dwindles as Growth Rate Shrinks

The share of luxury cars in India is about 1.17% of the overall passenger vehicle market, which is the smallest amongst othersectors. this share had reportedly shrunk due to the present uncertainties of the Indian economy and political scenario.

The Indian luxury car market almost contracted by a quarter in the first half of 2019. Though the luxury car segment leaders Audi and Mercedes-Benz seem to be optimistic about the forthcoming months, they also indicate concern over the possible dampening effect on their potential customer base due to the recent changes in the taxation of individuals with income higher than two crores which serve to be a major portion of the target market.
The shrink attracts attention as the market did worse than the rest of the industry, which is unusual in India as it typically outperforms the market. The first quarter witnessed a marginal decline but the second quarter saw a dip of almost 30% which was unresolved even by the means of additional dealerships and new model introduction.
Macroeconomic factors are turning out to be a substantial snag as high-interest rates, rising import costs and liquidity crunch had deeply affected the industry. India’s shift from Bharat Stage IV emission standards to BS-VI has also increased the cost associated with the technology change and could discourage more buyers.The major players of the automobile industry fear that the market may hit the lowest growth rate decline in a decade.

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