Jaguar Land Rover to Capitalize on India's Growing Luxury Market

As the number of wealthy individuals increases in India and the affluent are more willing to spend on luxury items, premium brands are experiencing a surge in demand.

Many foreign brands, ranging from FMCG to apparel to cars, are flocking to India to tap into this emerging luxury market. The latest entrant is Tata Motors-owned British brand Jaguar Land Rover (JLR), which plans to start assembling the flagship Range Rover model and the Range Rover Sport in India for the first time.

These models will join other JLR vehicles already assembled at its Pune plant, including the Range Rover Velar, Range Rover Evoque, Jaguar F-PACE, and Discovery Sport.

The decision to assemble the Range Rover model outside the UK for the first time is driven by India’s expanding luxury car market. Local assembly is expected to reduce prices by 18-22%, enhancing JLR’s competitive edge in India.

The luxury carmaker aims to launch at least six new models, both ICE and EV (internal combustion engines and electric vehicles), to capitalize on the growing number of high-net-worth individuals in the country. This marks JLR’s most aggressive push since entering the Indian market in 2009.

Luxury car sales in India reached a record high of 42,731 units in CY2023, a 20% year-on-year increase, according to Jato Dynamics. This growth is attributed to rising disposable incomes and the trend of upgrading post-COVID-19.

The momentum is expected to continue into 2024, driven by new launches and increasing aspirations. Super-luxury cars, priced above Rs 2 crore, also saw record sales in 2023. Lamborghini, with models starting from Rs 3.8 crore in India, sold 103 units last year, up from 92 in 2022. Similarly, Porsche reported its best retail sales in India with 914 units in 2023, a 17% increase from 2022.

SUVs are a major driver of luxury car sales, reflecting the growing affluence and adventurous spirit among Indians. Global luxury automakers are expanding their SUV offerings to attract India’s elite with the latest technology, electrification, and ultra-luxurious features.

Mercedes-Benz, BMW, and Audi plan to launch several new SUV models over the next three months to strengthen their presence in this segment, catering to the evolving lifestyle trends and preferences of affluent Indian buyers.

Luxury SUVs priced above Rs 50 lakh now account for up to 60% of sales for these companies, attracting a diverse range of buyers, including families and adventure enthusiasts. The versatility and commanding road presence of SUVs are increasingly favored over luxury sedans.

Mercedes-Benz, with the largest portfolio of a dozen SUVs, saw a 41% sales growth in Q1 2024, driven by record sales of models like the GLA, GLC, GLE, and GLS. This demand is expected to remain robust in the coming months, according to Santosh Iyer, MD of Mercedes-Benz India.

The company is also witnessing strong demand for its top-end SUV models, with more customers opting for road trips for business or leisure. Mercedes-Benz SUVs range from Rs 52 lakh for the GLA to Rs 4 crore for the AMG G 63, and the company plans to launch a facelift of its GLB SUV soon.

JLR India sold a record 4,436 units in 2023, an 81% increase from 2022, led by its iconic Range Rover models. In FY22-23, SUVs accounted for 52.7% of total luxury personal vehicle sales, rising to 59.5% in FY23-24, while the share of luxury sedans fell from 43.3% to 34.2%.

The number of high net worth individuals (HNIs) in India, with assets of at least $1 million, was 790,000 in 2022 and is projected to reach 1.65 million by 2027. Ultra-high net worth individuals (UHNIs), with assets of at least $30 million, numbered around 12,000 in 2022 and could exceed 19,000 by 2027, according to Bain & Co.

Mumbai has surpassed Beijing as Asia’s billionaire capital, with 93 billionaires, according to the Hurun Global Rich List 2024. This wealth is reflected in high sales across various luxury categories.

Bain & Co estimates that India’s luxury goods market, encompassing personal luxury goods, jewelry, home decor, cars, boats, and spirits, is currently worth $17 billion and is expected to reach $90 billion by 2030.

Luxury housing, priced at Rs 50 crore and above, has also seen significant growth. Luxury homes worth Rs 4,319 crore were sold in 2023, up from Rs 2,859 crore in 2022, according to JLL India. The number of transactions also rose, with 45 luxury homes sold in 2023 compared to 29 in the previous year.

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