Business

India’s 1% luxury car club is getting crowded

By Sohail Khan 27 September 2026, 5:30 am

Benchmarks
Nifty23,140.5077.41

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
20.4 %

Invest Now

Enter search text:

Business News›Industry›Auto›Auto News›Mass market automakers gaining ground in the premium segment; Mercedes, BMW work out different strategies to drive growth

Read Today's Paper

Mass market automakers gaining ground in the premium segment; Mercedes, BMW work out different strategies to drive growth
Synopsis

India’s luxury car market remains around 1% of passenger vehicle sales, but competition is widening as brands such as Toyota, Kia, MG and BYD have entered the premium segment with high-priced models.

Listen to this article in summarized format

Loading…
×
×

Unlock AI Briefing and Premium Content

New Year Offer 24 Hours Left
Already a member? Sign In

What's Included

Exclusive Stories
Daily ePaper Access
Smart Market Tools
Curated Investment Ideas
Ad-lite Experience
Subscription

Mercedes — India’s luxury car sales volume remains stuck at around 1% of the passenger vehicle market.

Mumbai: India’s luxury car sales volume remains stuck at around 1% of the passenger vehicle market, as affluent buyers look beyond the traditional marquee brands.

The top end of the market has become crowded, with automakers that do not traditionally carry a luxury tag such as Toyota, Kia, MG and BYD bringing high-priced premium models and taking away a section of potential customers who would have otherwise chosen the likes of Mercedes-Benz, Audi or BMW. Data collated by automobile consultancy Jato Dynamics show a marginal fall in the market share of legacy luxury automakers so far in calendar 2026, to 0.98% from 1.1% in 2025, even as the premium model range of mainstream and new-age brands grew their share to 0.14% from 0.12%.

The traditional luxury brands are now pursuing different routes for growth.

ET Bureau

Mercedes-Benz is moving further up the price ladder, while BMW is looking to widen the luxury offering with more products, electric vehicles, localisation and customers upgrading from mainstream brands, said their executives.

Mercedes-Benz India is targeting growth in value market share. Its average selling price has increased to about ₹1 crore over the past couple of years from around ₹60 lakh.

“We should not be looking at luxury growth from the prism of absolute volume and penetration alone, but from the quality of sales and value it adds,” said Santosh Iyer, managing director and CEO at the Indian unit of the German automaker.

Its top-end portfolio grew 20% in the first half of 2026 and accounts for 30% of sales. The company said it is seeing an increasing number of younger, first-time buyers.

BMW is targeting expansion from another direction.

Eye on EVs

Long-wheelbase products and electric vehicles are emerging as important growth areas for the company, BMW India CEO Hardeep Singh Brar. EVs now account for 26% of its sales, up from 8% two years ago, he said. Around 40% of its customers upgrade from non-luxury cars, while a similar proportion comes from other luxury brands, the company said.

According to Ravi Bhatia, president of Jato Dynamics India, the contrast in the strategies of Mercedes and BMW — one see-king to increase the value proposition while the other targeting areas like EVs to boost sales — explains why the 1% figure does not tell the whole story.

“Luxury can grow upwards without widening its ownership base at the same pace,” Bhatia said. Higher spending, customers changing brands and households buying their first luxury car are different sources of growth, he said. Beyond the traditional luxury marquees, the competitive set is widening further. In a group of cars that Jato selected for comparison, the high-priced models from mass-market manufacturers had a weighted average retail price of Rs 1.19 crore, compared with Rs 91.3 lakh for the traditional luxury brands.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

(You can now subscribe to our WhatsApp channel)

Read More News on
luxury car brandsIndia luxury car salespremium modelsBMW electric vehiclesmercedesluxury car market share

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year