The global luxury car market is anticipated to witness significant growth in coming years attributed to increasing purchasing power of the consumers. Rising demand of comfort and advanced features in cars is anticipated to propel market growth in coming years. Moreover, rising disposable income and growing need among consumers for maintaining social status can augment growth. Introduction of high-end interiors and innovative features by manufacturing companies are expected to drive the market in coming years. Increasing number of enthusiasts having strong attachment with automobile brands that offer top-level performance and unique experiences can augment market growth.
High cost of luxury cars and lack of service centers can hamper market growth in coming years. In addition, presence of cost-effective private vehicles and availability of alternative transport systems, including trains and buses can restrict growth of market. Moreover, change in duty structure and issues related to money lending can obstruct market growth. Liquidity crisis in non-banking financial companies (NBFCs) has made the loan process difficult for consumers and dealers, thereby challenging the market.
Introduction of luxury cars loaded with electric engines can present lucrative opportunities for the market. Major market players are expected to launch electric variants of their vehicles owing to rising environmental concerns and increasing fuel prices. This, in turn, can gain traction among consumers and boost vehicle sales.
The market can be segmented on the basis of vehicle type, drive type, and ownership. Based on vehicle type, the market can be categorized into hatchback, sport utility vehicle (SUV), and sedan. In terms of drive type, the market can be classified into electric vehicle and IC engine. On the basis of ownership, the market can be divided into pre-owned and new car.
Europe is expected to hold the largest share in the market attributed to presence of major market players, including Audi, Mercedes Benz, BMW, Jaguar, and Volvo. Mercedes Benz is expected to hold the largest market share in the United States, followed by BMW. These companies are expected to offer luxury cars in various segments, such as sedan, hatchback, and SUV. For instance, Jaguar Land Rover (JLR) launched its new SUV, which is engineered, designed, and manufactured in Britain. The new Range Rover Evoque is available in three fuel variants, including diesel, petrol, and hybrid, enabled by a premium transverse architecture. Similarly, Audi launched an all new A6 model at the motor show in Geneva. The upgraded version offers low emission 2.0 liter diesel engine. In addition, it has a seven-speed automatic gearbox with front-wheel drive.
Asia Pacific is expected to witness robust growth owing to increasing number of market players. Most manufacturing companies are likely to launch their new vehicles in India by 2019. For instance, Audi is likely to launch R8 and the fourth generation of A8 in India this year. A8 is lightweight in nature and the virtual cockpit offers two high-resolution displays. Whereas, R8 offers mild updates as it’s a facelift version. The vehicle also has a powerful 5.2 liter V10 engine. In addition, the company is expected to launch its first all electric e-tron SUV in India by early 2020. Similarly, Volvo is expected to launch its all new S60 in India by 2019. The company is also planning to assemble plug-in hybrid variant of XC90 at its plant in Bangalore by 2019.
North America is projected to emerge highly lucrative in coming years owing to increase in sales. Major market players, including Mercedes, BMW, Lexus, and Audi reportedly sold a large number of luxury cars in the United States by 2018. Moreover, these companies are likely to launch new vehicles in the region in the coming years. For instance, Mercedes Benz is expected to launch two different A-class sedan models in United States by 2019.
Some of the leading companies operating in the luxury car market are Mercedes Benz, Audi, BMW, Jaguar, and Volvo.
Research Support Specialist, USA