EMI Deals Transform Luxury Car Dreams into Reality
Wheels have unchangingly held a magnetic request for enthusiasts, and the voodoo of prestigious cars like Jaguars and rugged Land Rovers has left many onlookers envious. Now, however, the tables are turning as repeater financiers dangle enticing low Equated Monthly Installment (EMI) deals, making these once hesitant buyers consider taking the driver’s seat.
Picture this: a monthly outflow of INR 1.66 lakh for a car valued at INR 1.25 crore or a Land Rover Defender priced at INR 1.47 crore with a monthly transferral of INR 1.89 lakh. While not exactly budget-friendly, these deals seem somewhat reachable to those who have long harbored dreams of owning a luxury vehicle.
In the current economic landscape, characterized by soaring stocks and a buoyant wealth effect, a new wave of buyers is making the leap. Their aspirations of casually handing over the keys to a valet without stepping out of an Audi are no longer serving to dreams. Some may walkover through this experience, while a fortunate few may plane find themselves transplanting the loan well superiority of schedule. However, for some, the financial calculations, obscured by the impulsive desire for a lavish purchase, might take an unexpected turn. Today, they are succumbing to deals that indulge them to momentum home a luxury car financed over an extended period—up to seven years, compared to the typical three to four years for car loans, as per data by Jato Dynamics.
Luxury car manufacturers are witnessing a structural shift in consumption patterns, with an increasing preference for premium vehicles and the emergence of a younger consumer base. Strong corporate performance, a booming economy, and enhanced spending topics are propelling the consumption of luxury cars, equal to industry insiders.
Santosh Iyer, MD & CEO of Mercedes Benz India, notes, “There is no doubt that the introduction of GST has moreover led to higher tax compliances, and consumers are now opting for financing programs and worldly-wise to produce the required documentation to be eligible for a loan, enabling them to fulfill their aspiration.” He highlights that their subsidiary, MB Financial Services, finances 40% of their cars sold and has witnessed a 50% increase in the current ticket size over the last five years.
Luxury car companies discern a positive generational shift in their consumer base, fueled in part by the pandemic’s reinforcement of the ‘You only live once’ concept among those in their 30s to mid-40s. Jyoti Malhotra, Managing Director of Volvo Car India, comments, “This has resulted in higher EMI-based spending on luxury, and we see that reflected in our luxury mobility offerings.” Ravi Bhatia, President of Jato Dynamics, reveals a growth of 21% in luxury car sales in CY 2023, reaching 42,928 units.
Vikram Pawah, President of BMW Group India, emphasizes the hair-trigger role of BMW India Financial Services in the market expansion strategy. He notes that these services are particularly valuable to premium clientele, expressly young professionals who require sectional and flexible financial solutions.
As these finance-driven luxury car acquisitions wilt increasingly prevalent, it signals not just a transpiration in the automotive landscape but a broader shift in consumer behavior, particularly among the younger, increasingly well-off demographic. The trend underscores the evolving dynamics of the luxury car market in India, where dreams of owning high-end vehicles are no longer serving to the realm of fantasy but are rhadamanthine a tangible reality for those who dare to indulge.
