Italian supercar maker Lamborghini expects India to be among its top 15 markets in the next 2-3 years, and its recent India-first launches suggest they mean business. India, for example, was the first market to get the Huracan Evo after its global launch and was also among the top five markets for the company to launch the Urus—the company's first Sport Utility Vehicle (SUV)—and the rear-wheel-drive feature in its cars.
Lamborghini India sold a record 52 units in 2019 and aims to cross that figure in 2021. In fact, its head Sharad Agarwal has said that they are outperforming their competition and have performed well even during the pandemic. The company reported that it clocked 20% more sales in October-2020-March-2021 period as compared to the same period in 2019-20 in the pre-COVID-19 pandemic times. Even globally, the company has seen a growth of 37% pegged at 4,852 units in the first half of 2021 when compared with 2020 and 6.6% growth when compared with the same period in 2019.
"Lamborghini has always maintained a positive growth trajectory in India, except 2020, where we had challenges both on the supply side as well as demand side. During 2020 the segment declined by 30% in India. However, we started witnessing the recovery post September 2020," said Sharad Agarwal.
He said that post the second wave, there is a sharper V-shaped recovery and the demand rebounding much faster. "The super luxury segment is driven by the dream and aspirations of people and the scenarios like pandemic does not change these dreams and aspirations—we may witness that people may postpone their plans but as the times are right they would like to pursue with their dreams and look forward to bring their Lamborghini," he added.
One of the trends in India, he said, is that more young people are buying its super-luxury cars. "Earlier mostly third or fourth generation business entrepreneurs were buying Lamborghini; now we see a trend where more and more first generation business entrepreneurs are buying a Lamborghini," he noted.
Research and ratings agency ICRA concurs with Agarwal. "Average age of luxury car customers has definitely reduced in the last two decades, thanks to high disposable income as well as increasing aspiration level amongst certain consumer segments," Ashish Modani, vice president and sector head, corporate sector ratings, ICRA Limited said.
Modani explained that earlier, senior executives and businessmen were the key target audiences for the luxury car OEMs (original equipment manufacturers). "However, over the last two decades, especially in the last 8-10 years, car buyers in the 35-45 age bracket who are in mid-senior position are also increasingly exploring luxury cars for their usage," he said.
Another trend—Agarwal said—is that there is demand coming from Tier 1 and 2 cities. "We strongly believe that India represents an incredible opportunity, one in which we are performing very strongly," he said.
According to the Hurun Global Rich List 2021, India has the third-largest number of billionaires in the world but India is not even in the top 25 markets by volumes. In fact, the Indian luxury car market accounts for less than 1% of the overall auto market in contrast to 13% in China and 10% in the US—which are the top two markets globally.
While the country is seeing a consistent growth in its billionaire population, the super luxury segment is still in its nascent stage. "This does not reflect the true potential in the market. Some of the factors that have impacted the segment are consistent increase in duties and taxes and inconsistency in the government policies for the FBU (fully built unit) imports," he said.
Agarwal said another key challenge is congestion in cities and road infrastructure. "Though we don’t have much to change to ease the congestion, there has been consistent and significant improvement in the infrastructure over the past few years," he said.
He said that as a country we need to start celebrating the “Wealth Creators”. "These are the people that are dreaming big, establishing new businesses supporting the country's growth and are creating jobs. Most of our customers have built their businesses and when they achieve a certain milestone in their life, they want to reward themselves with their dream and aspiration – to own a Lamborghini," he said.