“They (SIPs) are our opponents. I inform my workforce if you’ll be able to break that (SIP funding) cycle, then exponential development is a given,” stated Santosh Iyer, gross sales & advertising head of Mercedes-Benz India in an interview to TOI.
Publish-pandemic noticed a considerable shift in India’s financial savings habits owing to a bull run seen within the capital markets, together with the emergence of smartphone functions which permit better entry to funding info. The inflows by way of SIPs have been above the Rs 12,000-crore mark since Could and hit a report excessive of Rs 13,040 crore in October.
Mercedes- Benz India posted its highest-ever second-quarter gross sales within the nation on the again of latest product launches and sustained demand for present automobiles.
Iyer within the interview additionally claimed that, in contrast to the West, India has a robust financial savings mindset owing to weaker social safety measures and Indians find yourself financial savings for themselves and their youngsters.
“That is in contrast to the West, the place you save for your self to the utmost extent. The Rs 50,000 {that a} potential buyer invests right into a SIP, if diverted in direction of the posh automobile market will see enterprise explode,” he stated.
Regardless of the pandemic and recession worries, the posh automobile market in India has been on an upward development. Business estimates round 17,000 luxurious automobiles have been bought within the nation between January-June 2022, which is a rise of 55% over 11,000 models bought within the year-ago interval.
Excessive taxation, one other headwind
Excessive taxes on cars within the Indian market is limiting gross sales of super-luxury automobiles, stated World CEO & chairman, Automobili Lamborghini, Stephan Winklemann informed ET in an interview earlier this month.
Winklemann, nevertheless, stated the problem is just not one confronted by the posh automobile business alone, however is proscribing the expansion of the whole vehicle market within the nation. “This isn’t solely a luxurious automobile concern. If we take a look at the inhabitants, evaluate this with the variety of automobiles bought in India and in the event you evaluate this with different international locations, it’s clear.”
“The automobile market (right here) is smaller in comparison with inhabitants, when it comes into comparability with markets like america, China or the European Union. So, this isn’t just for the posh enterprise,” he stated.
At current, India levies GST fee of 28% on cars, with further cess ranging between 1-22%, relying on the kind of car. Totally imported automobiles entice customs responsibility of 60-100% primarily based on the scale of the engine and price, insurance coverage and freight (CIF) being much less or greater than $ 40,000.