Premium and Luxury Cars Market in India 2024 – 2028

Premium and Luxury Cars Market in India 2024 – 2028

The luxury car market in India represents the rising aspirations and financial capacity of discerning consumers seeking exclusivity, advanced features, and superior performance. Dominated by prestigious brands, this segment comprises high-end vehicles with luxurious interiors, cutting-edge technology, and distinctive designs, thriving despite premium pricing and showcasing the evolving preferences of India's affluent consumer base.

Market insights:

The premium and luxury cars market in India was valued at INR 94.91 Bn in 2023. It is expected to reach INR 137.26 Bn by 2028, expanding at a compound annual growth rate (CAGR) of 7.31% during the 2024 – 2028 period. In 2023, luxury car sales in India reached an unprecedented high, experiencing a daily surge in sales of vehicles priced over INR 5 Mn from the pre-COVID-19 figure of 95 to 128. Despite this, the proportion of luxury vehicles in India's automotive market, slightly surpassing 1%, remains among the lowest compared to other major economies. However, over the past decade, the number of ultra-rich individuals in India has surged by 11 times, positioning the country as the third largest globally in terms of billionaire population, as per the Wealth Report 2022 by Knight Frank, following the United States and China in 2021.

Market drivers:

The surge in disposable income across various regions has played a significant role in boosting consumers' purchasing power, resulting in a noticeable increase in demand for luxury vehicles. Luxury car manufacturers are proactively adopting sustainability measures by integrating electric and hybrid models into their product offerings, marking a transformative transition towards eco-friendly and energy-efficient alternatives. This strategic initiative not only aligns with worldwide environmental priorities but also caters to the rising demand for sustainable luxury vehicles.

Market challenges:

In India, the growth of the luxury car market encounters obstacles due to insufficient infrastructure, adversely affecting the uptake and expansion of premium vehicles. The elevated costs of luxury vehicles, driven by hefty import duties, taxes, and advanced features, pose a substantial barrier to the market's expansion, rendering luxury cars considerably pricier compared to counterparts in other global markets.