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India’s luxury car market could likely double to over 80,000 units by 2030

August 15, 2023 | 1 min read | Industry News

The luxury car market in India is on the cusp of a promising trajectory, with expectations of double-digit growth over the next decade. This upscale segment is anticipated to outpace the mainstream passenger vehicle market by 2-3%, primarily fuelled by shifting consumer perceptions and a robust economy.

In the recent year of CY2022, the luxury car market in India registered cumulative sales of approximately 37,000 units. Even with a conservative projection of a 10% Compound Annual Growth Rate (CAGR), industry insiders anticipate this market to double, reaching 80,000 to 90,000 units per annum by 2030.

This growth trajectory implies that the luxury car market's penetration could potentially increase to 1.5 to 1.8% of the entire Indian passenger vehicle market, predicted to achieve 5 to 6 million units annually by 2030. Post-pandemic, the luxury car market showcased a swift resurgence, growing at almost double the rate of the mainstream market.

Two pivotal factors are expected to fuel the industry's future growth: economic and cultural development. Strengthened by robust corporate performance, healthy GST collection, and a thriving economy, the luxury market has flourished. As India gears towards becoming a $5 trillion economy, coupled with a younger demographic, the market is on track for a significant leap forward.

The automotive industry plays a vital role in shaping this trajectory. Manufacturers are actively responding to the evolving market demands by introducing a range of models, including those that are eco-friendly. The launch of new models consistently elevates market sentiment and momentum.

As the luxury car market matures, the strong residual value of these vehicles is likely to have a positive impact on new car sales. The shortened car replacement cycle, coupled with improved residual value, is poised to generate heightened demand for new vehicles.

In Conclusion, the luxury car market in India is poised for remarkable growth, underpinned by evolving consumer preferences and an economically vibrant backdrop. The industry's strategic focus on innovation, coupled with the appreciating residual value of luxury cars, underscores the potential for a dynamic and transformative automotive landscape in the forthcoming years.