No takers for ultra luxury cars amid slump; Agera, Buggati Vyron fail to … – Economic Times
Swedish car Agera, which retailed at around 16 crore, has failed to find any customers during its three years of existence in India, while Buggati Vyron, which is sold at 35 crore, has not generated much interest or any single customer. German sports car, Gumpert, too has failed to sell a single unit forcing an untimely exit from the Indian market.
A steep import duty at about 179% and lack of infrastructure are also contributing factors for luxury brands to leave the Indian market, experts said.
The flamboyant tag that accompanies these vehicles also keeps away most Indian billionaires, whose company’s stock values have not shown any great upswing in the past few years. “An Indian customer, who can spend 15 crore on a super car would most certainly have a house in a tax haven abroad, where he can own the same model at one-third the cost in India and enjoy better roads and efficient after-sales service,” says Farhad Vijay Arora, MD of Ultimate Lifestyles, a Mumbai-based importer of lifestyle products and high-end cars.
With their cutting edge technology and engineering excellence these cars need not just sales; they also need high-end service back up.
While sales of known marquee cars like Rolls Royce, that has a strong legacy in India, are still going reasonable, many super sports cars have not been able to ignite similar excitement in the market. Even Mercedes Benz’s Maybach, of which few units were sold across India could not sustain much interest.
The billionaire club normally settles for a known brand as the high level of impracticality of owning such engineering marvels, simply kills the pleasure quotient. People familiar with the industry said only the well-marketed brands known among the masses find favour with the aristocracy.
Over the years the government’s decision to increase import duty, which has gone up from 60% to 100% now, has almost doubled the price of these machines. Analysts say the double-whammy of higher taxes and weaker Indian rupee has virtually wiped out many expensive carmakers.
“In India, currently all super-luxury cars are imported. A rise in import duties and a fall in the rupee’s value against the US dollar have made these vehicles costlier, a factor somehow emerged as an obstacle for some brands,” says Amit Kaushik, principal analyst (Autos) at IHS Automotive. “The huge tax liabilities that come with such cars make a potential customer guilty of wasting huge amounts,” he said.
In the face of the high tax burden, some of the potential customers are going with the option of ‘Supercar Clubs’ to satisfy their thirst for driving an exotic model at a fraction of the cost and with no worries of ownership and maintenance.
The super luxury cars segment was expected to swell well beyond the 100-150 cars sold every year, but has remained stagnant for more than half a decade on slowing demand.