India’s car market may be stuck in first gear with barely 1-3% growth expected this financial year but the luxury end of the industry seems to be bucking the trend. According to a top auto industry official, India’s luxury car brands together totted up 12.5% growth in the January-November 2012 period, with calendar 2013 promising anywhere between an 11-18% clip. “Despite the slowdown, the Indian luxury car market continues to be one of the most exciting in the world,” said Tomas Ernberg, MD, Volvo Auto India. “From around 2,000 units five years ago, it hit 24,000 units in calendar 2011 and 27,000 units in January-November 2012.” The estimates for 2013, he said, range between 30,000-32,000 units.
The figures contrast sharply with overall car industry’s fortunes in the April-November period with a mere 1.2% growth. Not surprisingly India is suddenly top-of-the-mind for luxe car brands, including Volvo. “No one can afford to not focus on India,” said Ernberg. “Our estimates are that by 2020, the luxury car market in India will hit 1,50,000 units and our target is to claim over 13% of that market with 20,000 units in India.” That fresh focus, he said, kicks off from 2013 with Volvo going “full gas ahead” with a pipeline of new launches, expansion of distribution network and a larger marketing team. The niche car brand – previously owned by Ford and now by Chinese auto major Zhejiang Geely – saw its sales jump 150% over a miniscule base in 2012 from 325 units in 2011 to 810 units in 2012 and is targeting another 50% jump in 2013 to 1200 units. With a $1.2 billion loan from China Development Bank, Volvo globally is cash rich again and although it saw sales slip 6% globally in 2012, the focus is to double worldwide sales to 8,00,000 units by 2020. India’s luxury lineup is now increasingly veering towards SUVs and crossovers riding on the back of more than 60% growth in the overall utility vehicle sales. Volvo’s own S60 and XC60 clocked 45% and 35% growth respectively but the balance is slowly shifting towards crossovers, said Ernberg.