Luxury car sales in India have been very encouraging for foreign car manufacturers in India over the months before April and May when a sudden dip in sales has occurred. A decline in sales of 7.59 percent has been reported in May alone compared to the same period last year.
The luxury car market in India was expected to be hit really hard after the global economic meltdown started in October 2008 but became more visible only in the new fiscal year. It is surprising to note that there were not as many takers as expected for luxury cars even after car manufacturers had cut down prices by nearly Rs 50,000 in December. This was after the government announced special excise duty cuts to boost sales.
The hardest hit among all luxury car manufacturers was Mercedes-Benz which is currently the leader in the Indian car market. Mercedes-Benz car sales in India have shrunk by an astonishing 34.18 percent last month. It is a testament to the frugal spending habits of Indian car buyers when the economy gets leaner. People are unwilling to incur high expenses on car buying.
At the same time, though other new car sales are picking up gradually, they too have been through a dim period in between as sales continuously fell below expectations. Indian car buyers are wary of the reeling global economic scenario and have held back most of their spending. Car manufacturers will now have to use more than just their products to lure people. They will have to take up aggressive marketing and courageously foray into tier B and C cities with sales potential. They will have to look for newer avenues to generate sales and will need all their ingenuity to get their businesses back in shape again.
Till recently luxury car manufacturers kept claiming that recession has evaded their performance. It is rightly noted that luxury car manufacturers need to look beyond their products to sell their cars.
The luxury car sales were doing fine even at the time of recession. But wonder what has caused the dip now?