Luxury cars get cheaper as makers line up models

About two dozen luxury cars get assembled locally in India of marquee German and British brands

India has become a top-rated destination for luxury car production, as it plays host to Jaguar Land Rover, Mercedes-Benz, BMW and Audi. All of these added a string of models to their production lines.

About two dozen luxury car lines get assembled in India of the  marquee German and British brands, some of which are not produced anywhere else but in their home country.

The increased localisation has led to a reduction of Rs 2 lakh to Rs 90 lakh in their sticker price, due to lower taxes. Most of these products were brought to India as a completely built unit (CBU) from their home country, Germany or the UK, which led to doubling of their rates.

Tata Motors-owned Jaguar Land Rover (JLR) shaved nearly Rs 8 lakh on its global best-seller Range Rover Evoque when it announced the latest prices of the SUV, which now starts at Rs 47.1 lakh after local assembling.

Mercedes-Benz, first in this country's luxury car market, has started local assembly of the Maybach S500, leading to a reduction of Rs 93 lakh to Rs 1.67 crore.

Outside Germany, this is the only country to produce the Maybach. Both Mercedes-Benz and JLR have factories at Chakan, near Pune.

Roland Folger, managing director, Mercedes-Benz India, said: “We are glad to offer world-class products to our Indian customers, with significant local value addition, in the shortest possible time. Our localisation level of up to 60 per cent is the highest in the luxury car industry and we continuously pass on the benefits to our customers...result of our long-term vision (to) create a strong foundation for our business in India.” Mercedes-Benz presently makes eight products out of Chakan.

These being the CLA, C-Class, E-Class, S-Class, Maybach S500, GLA, GLE and GL-Class sport utility vehicle. It imports more than the same number from Germany, including the compact A-Class and B-Class cars.

Former luxury car market leader BMW is not far behind.

The German heavyweight has increased its localisation content in its cars to up to 50 per cent.

BMW, which set up a plant at Chennai, produces eight models from there, from Rs 29.5 lakh to Rs 1.25 crore. Components such as engine and transmission, axles, door panels and wiring harness, exhaust systems, heating, ventilating, air-conditioning, cooling modules and seats are procured by BMW locally.

Philipp von Sahr, president, BMW Group India, said: “The future belongs to India. If you want to benefit from the dynamics of the Indian market, you need to act today. Following our approach that ‘Production follows the market’, we have accelerated our localisation programme."

Audi, another German leader, makes its cars and SUVs from Aurangabad in Maharashtra, a facility there which it shares with sister brand SkodaAuto.

Audi makes its A3, A4, A6, Q3, Q5 and Q7 models from the India plant; it imports seven other models.

The driving down of costs has helped boost volumes, say car makers. A little more than 30,000 luxury cars were sold last year between the four manufacturers; Mercedes and Audi each had more than 10,000 unit sales.

Demand for the Mercedes-Benz CLA, which began with local assembly in September, has seen a substantial spike in volumes, say officials.

India is the only market outside Europe to produce it. In addition, the GLE became the first model for Mercedes to be locally assembled from its debut.

“With the localisation, we have passed on the tax benefits to the customers and have added a value proposition to their purchase. Localisation has buoyed the demand and help reduce the waiting list of many of the models with higher availability,” added Folger.