As the sale of luxury cars in Europe, Japan and the US slow down, consumers in India are paying out a small fortune to take the key from the salesman and drive away the car of their dreams. Since the global economic collapse, the car industry has remained erratic, dipping and peaking retrospectively. 

Only a decade earlier anyone driving a Mercedes-Benz in India was considered to be amongst the motoring elite – a bunch of well-heeled and resented individuals who were few and far between. Today the picture is radically different, with Land Rover, Jaguar, BMW and Mercedes now feverishly competing in a thriving market that is being lapped up by disposed consumers.  

What are the reasons behind the consistent surge in India to be seen driving a car regarded as the height of extravagance?

Unlike many other nations still paralyzed by a fragile economy forcing its citizens into an undesirable state of frugality, India is experiencing robust economic growth and luxury car makers are consequently reaping the benefits.

Experts emphasize that the reasons behind the significant growth in India’s luxury car industry is because of an increasing per capita income. According to Mr Sahil Kedia, an auto analyst from Enam Securities:

“The burgeoning population of upper and upper middle classes with disposable incomes drive the luxury car segment.”

Car manufacturers are recognizing the escalation of disposable incomes in India and are acting accordingly by launching new models, giving enthusiastic consumers increasingly greater choice. At the end of 2010 the eagerly awaited luxury Toyota Etios will be available in India and not wanting its Japanese rivals to soak up the profits alone, Audi has announced its A8 luxury sedan will hit the Indian market before the year is over. Whilst Mitsubishi is setting its sights high in India by launching the Lancer Evolution X into its Indian showrooms.

Although a study carried out by an independent research company has predicted that the luxury car sector in India will increase threefold by 2015, whenever there is a boom it is usually followed by a bust, and judging by India’s shaky start to hosting the Commonwealth Games, we marvel whether a robust economy will be sustainable in India, and whether the gleaming Chevy Cruze’s seen cruising down the road will be quickly surpassed for India’s Tata Nano, which with a price tag of just £1,300 is the world’s cheapest car.  

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