Asia

Tourist and Leisure Transportation

Performance and Tuning Retail

India Premium and Luxury Cars Market (2023-2029)

Get Customized Report

Author

Geetanshi Chugh

Published On

Oct 2025

Product Code

KRR67

Base Year

2024

India Premium and Luxury Cars Market (2023-2029)

Market overview

Industry Analysis

Competitor Analysis

Macroeconomic Indicators

Table of Content

FAQ's

Failed to copy link

Summary

The India Premium and Luxury Cars market is segmented by body type (SUVs, Sedan, and Hatchback), and by fuel type (petrol, Diesel, Electric). Factors such as Rising preference for Luxury SUVs, increasing dominance of electric vehicles, increasing number of HNWIs & UHNWIs and preference for high end driving experiences are driving the growth of India Luxury and Premium Cars market.

Market Overview

India Premium and Luxury Car Market Overview

India Premium and Luxury Cars market is expected to reach INR 146.1 Bn by 2029 with a CAGR of 7.5% during the forecast period 2023-2029.

Rising preference for Luxury SUVs, increasing dominance of electric vehicles, increasing number of HNWIs & UHNWIs and preference for high end driving experiences are some of the major drivers of India Premium and Luxury Cars Market.

Tata Motors, Mercedes Benz, BMW, Skoda Volkswagen, Toyota Kirloskar, Volvo Group are some of the major players in India Premium and Luxury Cars Market.

India Premium & Luxury Cars Market Definition

India Premium & Luxury Cars Market Definition: In this report, the India Premium and Luxury Cars Market is based on revenue in INR billion which is calculated based on total sales of premium and luxury cars in India. The market is segmented by body type (SUVs, Sedan, and Hatchback), and by fuel type (petrol, Diesel, Electric). The report encompasses of all major players including Indian and Foreign brands such as Tata Motor, Mercedes Benz, BMW, Skoda Volkswagen, Toyota Kirloskar, and Volvo Group. Additionally, the report will analyze market future projections, industry analysis, and key factors influencing India Premium and Luxury Cars Market. Impot/Export and reselling of premium and luxury car have been excluded from the market size.

Taxonomy

India Premium & Luxury Car Market Size

In 2023, there was a remarkable surge in luxury car sales, especially those priced over ₹50 lakh, increasing from 95 to 128 cars sold daily compared to pre-COVID-19 levels. This surge is attributed to post-pandemic lifestyle adjustments, robust corporate profits, and heightened interest from younger professionals.

The increasing demand for luxury cars is fueled by rising disposable incomes, evolving lifestyles, and a preference for high-end driving experiences.

Additionally, the Government of India is actively encouraging the adoption of luxury electric vehicles (EVs) as a sustainable transportation option to mitigate carbon emissions, aligning with growing environmental awareness.

India Premium and Luxury Cars Market Industry Analysis

The premium and luxury cars market in India has shown consistent growth, with sales rising from 34,600 units in 2019 to 42,731 units in 2023, reflecting a Compound Annual Growth Rate (CAGR) of 5.42% during the period from 2019 to 2023. This upward trend was primarily driven by the increasing disposable incomes of consumers, especially in urban areas, which boosted demand for premium vehicles. The expansion of dealership networks and aggressive marketing campaigns by luxury car manufacturers further enhanced accessibility and brand awareness among potential buyers. Moreover, the launch of technologically advanced models by prominent brands such as Mercedes-Benz, BMW, and Audi attracted customers looking for innovation, superior design, and enhanced driving experiences. Additionally, favorable financing schemes and incentives offered by manufacturers and financial institutions encouraged more consumers to invest in luxury cars, contributing significantly to the market’s overall growth.

Strength

Australia has a robust agricultural sector that produces a diverse range of perishable goods, including fruits, vegetables, dairy products, and meat. This provides a solid foundation for the cold chain industry as it requires temperature-controlled handling and distribution.

Weakness

Dispersed population presents logistical challenges in managing an extensive cold chain network. Remote and regional areas have limited access to cold storage facilities and face higher transportation costs.

Opportunity

The adoption of advanced technologies such as IoT sensors, real-time monitoring systems, and data analytics presents opportunities to improve efficiency, reduce waste, and enhance supply chain visibility.

Threat

The industry is subject to stringent regulations. Failure to comply with these regulations can result in penalties, damage to reputation, and legal consequences.

Luxury SUVs on the Rise in India

The luxury car market in India is witnessing a notable shift in consumer preferences, with demand moving away from luxury sedans and hatchbacks toward luxury SUVs, which is driving substantial market growth. In response to this trend, leading international manufacturers such as BMW, Mercedes-Benz, Volvo, and Audi are introducing new SUV models each year to cater to evolving customer expectations. For instance, in June 2021, Mercedes-Benz launched the Mercedes-Maybach GLS 600, marking the debut of the first SUV under its prestigious Maybach brand. Similarly, during the same month, Range Rover introduced the high-performance Range Rover Sport SVR, featuring advanced amenities such as heated seats, driver condition monitoring, and enhanced parking assistance. These developments underscore the growing dominance of luxury SUVs in the Indian market, presenting a significant opportunity for luxury car manufacturers to capitalize on this rapidly expanding segment.

Rise of Electric Vehicles on the Verge of Domination

The rise of luxury electric vehicles (EVs) in India is poised to drive substantial growth in the country’s luxury car market. Established brands such as Mercedes-Benz, Audi, BMW, and Volvo are actively expanding their EV portfolios, supported by state government initiatives that also aim to facilitate Tesla’s entry into the market. Mercedes-Benz, a leading player in the segment, announced plans to launch the EQS saloon—priced competitively with its petrol counterpart—alongside favorable manufacturing incentives such as a 5% GST rate for EVs that encourage local production. In January 2022, the company marked a major milestone with the launch and local production of the EQS, India’s first domestically manufactured luxury EV. Similarly, Audi commenced its electric journey in July 2021 with the introduction of the Audi e-Tron lineup, offering multiple variants. As emission norms tighten and environmental awareness grows, the demand for sustainable and high-performance vehicles continues to rise, propelling the expansion of the luxury EV market in India.

Rising number of HNWIs and UHNWIs

The expansion of India’s premium and luxury car market is being significantly influenced by the country’s growing affluent demographic, particularly the rising number of High-Net-Worth Individuals (HNWIs) and Ultra High Net Worth Individuals (UHNWIs). These wealthy consumers form the core customer base for luxury and ultra-luxury vehicles, especially in the electric segment, where premium pricing and extensive customization options cater to their preferences for exclusivity and innovation. According to forecasts by Knight Frank, the global HNWI population is expected to grow at a Compound Annual Growth Rate (CAGR) of around 9% over the next five years, exceeding 100 million by 2026. This anticipated rise in affluent individuals is likely to drive significant expansion in India’s luxury automotive sector. Coupled with increasing disposable incomes and evolving lifestyle aspirations, this trend underscores a growing appetite for opulent, technologically advanced vehicles, creating lucrative opportunities for manufacturers and stakeholders in the luxury car market.

Adoption of Cutting-Edge Marketing and Distribution Strategies

Innovations in marketing and distribution are transforming the landscape of India’s luxury car market. With the rapid digitization of the Indian economy, luxury car manufacturers are increasingly emphasizing digital marketing strategies to reach their target audience more effectively. Industry reports indicate that digital advertising expenditure in India is set to grow steadily, reaching approximately $9.6 billion by 2024, with luxury car brands expected to significantly boost their digital ad budgets by 2023. Advancements in data analytics are further enabling brands to personalize marketing campaigns based on consumer behavior and preferences, with projections suggesting that by 2025, more than 60% of luxury car marketing initiatives will be driven by data analytics and machine learning. Additionally, innovative distribution channels such as mobile showrooms and online configurators are gaining momentum, with online sales anticipated to account for 10–15% of total luxury car sales by 2025. Collectively, these strategies are empowering luxury car brands in India to strengthen their market presence, enhance customer engagement, and capitalize on the growing demand for premium vehicles.

Tax Hurdles Being Roadblocks for Luxury Cars

The Indian luxury car sector continues to face significant challenges stemming from high import levies and taxes. Luxury vehicles imported as completely built units (CBUs) are subject to steep tariffs, including up to 50% Goods and Services Tax (GST) and 110% basic customs duty, making them substantially more expensive in India compared to other countries. Despite these heavy duties, the market for luxury cars expanded to over INR 94.9 billion in 2023; however, its share of total passenger vehicle sales declined from 1.3% in 2019 to 0.6% in 2021. The Federation of Automobile Dealers Associations (FADA) also reported a 35% drop in luxury car sales during the first half of 2021, primarily due to the prohibitive tax structure. For instance, a Mercedes-Benz S-Class valued at around $100,000 in the U.S. can cost more than $250,000 in India once taxes and import duties are applied. This cost disparity continues to limit the accessibility and growth potential of the luxury car market in the country.

High Maintenance and Repairing Expenses

One of the major challenges confronting the luxury car sector in India is the high cost of maintenance and repairs. European luxury cars, though known for their performance and design, are often not ideally suited for Indian road conditions, resulting in higher wear and tear and increased servicing requirements. According to a CarDekho survey, luxury cars require about 70% more servicing visits compared to mass-market vehicles. For instance, a Mercedes E 250 diesel typically needs a suspension overhaul every 1 lakh kilometers, costing around INR 5 lakh, while more durable brands like Toyota demand significantly lower maintenance. On average, premium car owners spend approximately INR 1.5 lakh annually on upkeep, compared to INR 50,000 for non-luxury car owners, with maintenance expenses ranging between INR 1 lakh and INR 5 lakh per year depending on the model. Some manufacturers, including Mercedes-Benz (C-Class), Audi (A3), Volvo (S60), and BMW (3 Series), have made strides in developing models with lower maintenance requirements, bringing annual costs down to between INR 50,000 and INR 1 lakh. However, buyers must recognize that ownership costs rise substantially as vehicles age, particularly after the warranty period ends, making it crucial to consider long-term maintenance expenses before investing in a luxury vehicle.

In recent years, several global luxury car manufacturers have expanded their presence in India through high-profile launches. In March 2022, Mercedes-Benz India introduced the new S-Class sedan under its prestigious Maybach brand, priced from INR 2.5 crore (ex-showroom). Customers can choose between locally manufactured units and completely built units (CBUs), offering greater flexibility and exclusivity. In December 2021, Aston Martin entered the luxury SUV segment in India with its first-ever SUV, priced at INR 3.82 crore. Powered by a Mercedes-AMG-sourced 4.0-liter twin-turbo V8 engine, the model delivers 542 bhp and 700 Nm of torque, paired with a nine-speed automatic gearbox. A month earlier, in November 2021, Audi launched the new Q5 luxury SUV, starting at INR 58.9 lakh, marking the return of one of its best-selling models in India. Similarly, in October 2021, Jaguar unveiled the fifth-generation F-Pace, including the MHV variant, offered in four trims—F-Pace 250, 250 S, S 340, and R-Dynamic S 400. The S 340 model features a 3.0-liter six-cylinder turbocharged mild-hybrid engine producing 335 hp, while the R-Dynamic S variant enhances output to 395 bhp. These launches highlight the growing commitment of global luxury automakers to the Indian market and the increasing appetite among Indian consumers for premium, high-performance vehicles.

In November 2021, the Union Government introduced over 100 advanced automotive technologies under the Production Linked Incentive (PLI) scheme, covering innovations such as advanced driver assistance systems, flex-fuel engines compliant with Bharat Stage VI standards, compressed natural gas (CNG) systems, electronic control units (ECU) for safety, and e-quadricycles. As of July 15, 2022, oil firms operating under the Ministry of Petroleum and Natural Gas (MoPNG) had established 532 EV charging stations across India under the FAME India Scheme I and II. To further encourage foreign participation, the Indian government approved 100% FDI under the automatic route for the automobile sector and, in January 2023, sanctioned US$ 97.77 million (approximately ₹800 crore) for 7,432 public fast-charging stations as part of the FAME-II program. Additionally, the 2022–23 Union Budget introduced a Battery Swapping Policy emphasizing clean technologies and sustainable mobility, including the development of interoperability standards to minimize long charging wait times. The PLI scheme, launched in April 2020, was designed to provide incentives for domestic manufacturing and attract major investments in key sectors. Initially allocated ₹57,042 crore for five years, the budget was later reduced to ₹25,938 crore to prioritize green automotive manufacturing, reflecting India’s growing focus on sustainable mobility and localized production.

Company Profile of Major Players in India Premium and Luxury Cars Market

Company Name	Establishment year	Description
Tata Motors	1945	Tata Motors is a globally recognized automotive manufacturer that has a keen emphasis on delivering safer, more environmentally friendly, and intelligent mobility solutions. Apart from India, it has operations in China, the US, the UK, and the rest of Europe, among other international locations. They provide a comprehensive array of integrated and electric mobility solutions across various segments, including cars, utility vehicles, trucks, buses, and defense vehicles. Tata Motors has established over 2,600 touchpoints, serving customers across more than 44 countries. Additionally, since 2008, Tata Motors has included JLR India (formerly Jaguar Land Rover India) in its portfolio, making it the largest automotive manufacturer in Britain, renowned for designing, manufacturing, and selling some of the world's most prestigious cars.
Mercedes-Benz India Private Limited	1994	Mercedes-Benz India has been a prominent player in the luxury car market, boasting over 130 years of innovative excellence in the global luxury automobile industry. Founded in 2009, Mercedes-Benz India's state-of-the-art production facility spans 100 acres in Chakan near Pune. Since June 2015, it has been operating from an expanded production facility on the same premises. Being vital part of Mercedes-Benz's Global Production Network, this manufacturing unit plays a significant role in the CKD/MVP production network across Brazil, Indonesia, Malaysia, Thailand, and Vietnam.
BMW India Private Limited	2007	BMW India Private Limited is a part of BMW Group, which stands as the foremost provider of premium cars and motorcycles globally, serving as the headquarters for renowned brands such as BMW, MINI, Rolls-Royce, and BMW Motorrad. BMW India commenced operations in January 2007, engaging in a wide range of activities. These include a manufacturing plant in Chennai, a parts warehouse in Mumbai, a training center in Gurgaon NCR, and the development of a dealer organization across major metropolitan centers in the country.
Skoda Auto Volkswagen India Private Limited	2007	Škoda Auto Volkswagen India Private Limited (SAVWIPL) serves as the representative for The Volkswagen Group's passenger vehicle brands in India. The group's presence in India spans over two decades, commencing with the introduction of the Škoda brand in 2001. Audi and Volkswagen made their entry into the Indian market in 2007, with Porsche and Lamborghini joining in 2012. SAVWIPL, resulting from the merger of Škoda Auto India Private Limited (SAIPL), Volkswagen India Private Limited (VWIPL), and Volkswagen Group Sales India Private. Limited (NSC), offers a diverse portfolio of over 40 models across its five brands through a network of more than 446 touchpoints
Toyota Kirloskar Motor (TKM)	1997	Toyota Kirloskar Motor (TKM) was established in 1997 as a joint venture between Toyota Motor Corporation and Kirloskar Group. TKM has manufacturing plants in Bidadi, Karnataka, where it produces a range of vehicles for the Indian market. The company is known for its commitment to quality manufacturing processes and adherence to Toyota's global production standards. Popular models in the Indian market include the Toyota Innova Crysta, Toyota Fortuner, Toyota Glanza (a rebadged version of the Maruti Suzuki Baleno), and hybrid models like the Toyota Camry Hybrid.
Volvo Group	1998	Volvo Group is a well-known global manufacturer of luxury cars, trucks, buses, construction equipment, and marine and industrial engines. Volvo Group India is involved in the production and sale of a wide range of vehicles and equipment, including trucks, buses, construction equipment, and industrial engines. Volvo Cars, in collaboration with ECARX, is a co-owner of HaleyTek, a company dedicated to developing Android Automotive-based infotainment platforms for the group and external entities.

India Premium and Luxury Car Market Macroeconomic Indicators

India's population is currently 1437 million in 2023, increasing by 30 million from 1407 million in 2022. By the end of 2025, India's population is predicted to reach 1500 million.

In the year 2020, The population between the 25-49 age group is the largest age group (36.40%)  in India followed by 0-14 (26.40%), 50+ (19.40%), and 15-24 (18%).

In 2023, India's GDP was valued at USD 3732 billion, up from USD 2710 billion in 2018. The country’s GDP is expected to reach 5000 billion by the end of 2025.

In 2023, India’s Inflation rate stands at 5.66 % an increase of approximately 2.5% from the 2018 inflation rate of 3.94%. During the COVID-19 pandemic in 2020, the inflation rate in India surged unexpectedly to 6.62% from 3.72% in 2019.

As of 2023, India comprises of majority of the middle-class population which is 57% of the total population of India. After the middle class comes the lower class category which comprises 33% of the total population of India. The remaining 10% of the population belongs to a high-income class.

1.1. India Premium and Luxury Market Highlights

1.2. Market Definition

1.3. Taxonomy

4.1. India Premium and Luxury Car Market Size (in INR Bn), 20218-2023

4.2. India Premium and Luxury Car Market Size (in INR Bn), 20218-2023

5.1. India Premium and Luxury Car Market Segmentation, 2023

5.2. India Premium and Luxury Car Market Segmentation, 2023

5.3. India Premium and Luxury Car Market Segmentation, 2023

5.4. India Premium and Luxury Car Market Segmentation, 2023

6.1. India Premium and Luxury Car Market Segmentation, 2023

6.2. India Premium and Luxury Car Market Segmentation, 2023

6.3. India Premium and Luxury Car Market Segmentation, 2023

6.4. India Premium and Luxury Car Market Segmentation, 2023

Disclaimer

Frequently Asked Questions

Find quick answers to common questions about India’s fast-growing premium and luxury car market.

India Premium and Luxury Cars Market (2023-2029)

Author

Pages

Published On

Product Code

Base Year

Summary

Market Overview

India Premium and Luxury Car Market Overview

India Premium & Luxury Cars Market Definition

Taxonomy

India Premium & Luxury Car Market Size

India Premium and Luxury Cars Market Industry Analysis

Company Profile of Major Players in India Premium and Luxury Cars Market

India Premium and Luxury Car Market Macroeconomic Indicators

Frequently Asked Questions