At the time when the car industry was hit by inflation, luxury cars have witnessed a good market but now the scenario has changed. Today, when the entire industry is in the grip of slowdown due to economic recession, luxury car are also facing a downturn.
Top luxury car manufacturers like BMW, Mercedes-Benz, Porsche, and Audi have recorded negative sales in October this year. All these brands are feeling the pinch of tight credit crunch in the market as car buyers are postponing their purchase.
The sales of high-end luxury cars fell to about 30.51% that accounts for a sale of 2,859 units in October 2008 against 4,114 units in the corresponding month last year. According to the data and reports compiled by SIAM, even the month of November has not shown any kind of improvement in the luxury car market.
To help improve the market condition and boost sales, Porsche has tied up with Reliance Capital. This collaboration is mainly aimed at meeting customer’s finance needs and boosting luxury car sales.
The sales of luxury cars falling in the price band of Rs 75 Lakh to Rs 1.25 Crore have declined to about 61.19%. This price band includes all the premium luxury cars including the BMW 7 Series and Mercedes-Benz S Class.
BMW India President Peter Kronschnabl said, “There has been a slowdown in growth in the past two months. We may not be able to sustain the kind of growth we had in the first nine months for the rest of the year. The credit crisis has now reached the luxury segment and customers are postponing their purchases to next year. We are hoping next year will be better.”
Even with such a hard hit by the recession, BMW India hopes to meet its sales target of 2,800 cars for this calendar year. The company also has plans to introduce its new 7 Series in early 2009. The sales of this elegant and luxurious car have also declined 17.39% to 19 cars in October this year compared to 23 cars in the October 2007.
In this same segment, Mercedes-Benz has also recorded a steep fall of its leading cars comprising the S-class sedans and the AMG Class.