Gujarat's luxury car market in Formula 1 mode

Gujarat has steadily grown from being a conservative market for premium cars with 2 per cent share to one that now has a 6.5 per cent share of domestic premium car sales. The state accounted for nearly 15 per cent of national sales of luxury cars during the car buying spree in Dussehra in September.

"The Gujarat market has been traditionally conservative compared to more flamboyant spending behaviour in the National Capital Region(NCR) and Mumbai. But, that is changing now. From a mere 2 per cent share of net luxury car sales in India around a year and a half back, the state now has a 6.5 per cent share," said Sanjay Thakker, chairman of Landmark Honda and also promoter of the dealership chain that has Mercedes Benz and Volkswagen AG outlets. He added that while the luxury car market is estimated to grow from around 8500 cars and sports utility vehicles (SUVs) in 2009 to around 10,000 vehicles in 2010, Gujarat's share should rise from a current 6.5 per cent to around 8 per cent.

Luxury car dealers here felt that there should be a 50 per cent rise in sales in 2010. Dealerships are in an expansion mode: Planet Petal, the exclusive dealers of Nissan Motors India in Ahmedabad, are all set to come up with two more outlets in Rajkot and Baroda within the next few months after they inaugurated their first outlet in the city a couple of weeks back. Thakker's Automark Motors, dealers of Mercedes in Ahmedabad, are starting a new outlet in Surat in the next few weeks. Sukhbir Bagga, director of Group Planet Petal said that upbeat from the current trend,they are looking at sales of Nissan cars to touch 3000 units by the end of 2010. Nissan has been selling completely-built-units (CBUs), its sedan Teana priced above Rs 21 lakh and sports utility vehicle(SUV) X-Trail that is priced around Rs 25 lakh in India so far. It will launch yet another CBU model, Nissan's sports car, 370Z in January next year besides starting production on its global compact car Micra from May 2010.The Micra will be positioned in the B+ segment.

There was a spurt in general buying during Dussehra this year when the sales of sedans overall jumped from a 1000 cars per month in Gujarat to 1500 cars in September. Mercedes sold 60 units in Gujarat alone of its net all-India sales of 415 cars in September 2009. "Easy financing option is perhaps one of the reasons for the interest in luxury car buying in this relatively conservative market. While rates of interest have fallen, companies offer interest-free equal monthly installment (EMI) options periodically", Thakker said. Mercedes had offered on easy EMI offers on its E-class sedans before phasing it out and introducing its upgraded version.

Currently, Volkswagen has four dealerships in the state, at Ahmedabad, Baroda, Rajkot and Surat, Mercedes has one in Ahmedabad while another is coming up in Surat, BMW,Audi and Nissan have one showroom each in Ahmedabad.

During April to October this year 2603 units of luxury cars were sold across the country as against 2218 units a year back, up 17 per cent.

Courtesy: Business Standard.