Thursday, 21 July 2011

Racy New Sports Cars Enter the Luxury Market





In March, Lamborghini introduced LP 700-4, while Audi launched its R8 during February with a V10 engine. Sports car lovers are now eagerly awaiting the Jaguar XKR-S which was globally unveiled at the Geneva Motor Show in March 2011.

Most of these models are in the crore-plus category and unlike run-of-the-mill luxury models, are not chauffeur-driven cars. "These are leisure vehicles," says Kumar Kandaswami, senior director of Deloitte. "They are lifestyle choices, not functionality-driven." One of the reasons the segment is rocking, he says, is the sudden boom in sports car options in India. "Brands like Maserati, Ferrari and others are showcasing their flagship products in India to mark their presence," says Kandaswami. "It's a mindshare rather than market share game and that buzz is driving the segment." 

Most experts reckon this niche in the luxury market will continue to be very small, may be 15-25 cars a year per brand restricted to a couple of metro markets but it would be a brand shaper for auto companies. In a market where the luxury models are facing stagnation, this would be a crucial growth driver. Last year, Rolls Royce sold 70-80 cars in India. At Rs.2.5-4 crore tag those are excellent numbers. This year though, the first six months have been flat. Yet the sportier luxe marquees are humming. 

Sports cars are popular

Sports cars do not add much to the overall heap in terms of value since it's still a niche segment but they are a huge image driver and that's why there is a rush to fill up that space among auto companies, says a luxury car marketer. That was the supply side. On the demand side too, the well-heeled are now more conscious about what they represent and a lot of them are opting for sports cars to define that perception. What also fuels the trend is when pictures of celebrities are pasted in the glossies with their sports cars. So Sachin Tendulkar's recent acquisition of a Nissan GTR or Sanjay Dutt's penchant for Ferraris or even Raymond boss Gautam Singhania's need for speed are actually drivers of that aspiration as well. 

Ashish Chordia, chairman of Shreyans Group which boasts dealerships of brands like Ferrari, Maserati and Porsche, says "Sales for luxury cars in general are on the rise over the last four to five years and sports luxury cars are no different. The premium car sector grew by 70 per cent last year and so far this year we have had a very encouraging response to all our sports luxury brands." 

Age is Bar 
There is a reason why the market dynamics are changing. Demographics is one of them. As a consumer market, India is one of the youngest countries with an average age of around 27 years. This makes it the country with the lowest median age as compared to any other markets such as China (35 years), US (37), Russia (39) and UAE (40). With rising disposable incomes, the Indian consumer and particularly the luxury car buyer, is also getting increasingly younger in profile. "That holds true for Mercedes buyers as well - the age of our average customers ranges between 30-35 years, depending on the type of the vehicle," says Mercedes India CEO, Peter Honegg.

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