Not just luxury, young Desis want cars that perform too

However, he bought the India-assembled AMG GLC 43 Coupe instead. The 29-year-old from Gujarat, who runs a blockchain business, was completely enamoured by the car from Mercedes-Benz’s performance range after he drove it once. He dropped the SUV plan and went for the AMG GLC 43.

“I was getting an AMG variant by just paying an additional Rs 15-20 lakh (over the SUV),” said Majumdar. “So, while I use it on a daily basis, I can put it on ‘sports mode’ when I need to.”

Luxury carmakers are seeing an increasing number of young and upwardly mobile customers opting for the ‘performance’ range of cars. Demand for these high-end vehicles had weakened in 2020 and the early part of this year amid the disruptions caused by the pandemic, but is now picking up strongly, say industry insiders. Automakers such as Mercedes-Benz and BMW are also encouraged by India’s expanding club of young millionaires – their potential customers – amid record fund flows into the startup sector and a bull run on the stock markets, and are setting up local assembly units to make these vehicles a little more affordable.

Performance cars are characterised by powerful engines, quick acceleration and higher top speeds, making the vehicles more exclusive and, consequently, more coveted by automobile enthusiasts.

Majumdar, the blockchain businessman, said he was attracted by the engine dynamics, quick acceleration and sportier looks of the new car.

Of the 13 AMG models offered by Mercedes-Benz India, the AMG GLC 43 Coupe, AMG A35 Limousine and the AMG GLA 35 SUV – in the price range of Rs 70-95 lakh – are locally assembled. BMW locally produces the M340i, while Audi is exploring assembling its top-end performance-based electric vehicles here.

A niche segment till now, the demand for high-performance cars in India, which combine practicality, performance and luxury, is growing among young consumers.

For the manufacturers, these performance cars priced from ₹60 lakh to ₹2.5 crore not only give them better margins, but also serve as showpieces for the brand, say industry experts.

LOCAL ASSEMBLY VS COST

Local production can make these cars cheaper by at least ₹20-25 lakh. Luxury-car makers have been manufacturing a number of their entry-level models here given the potential and strategic importance of India as a market. Starting local production of high-performance cars now is a logical step for them as they can reduce prices, attracting more buyers, say experts.

“Localising the AMG portfolio is part of our strategic plan to strengthen the AMG brand and spur demand for such vehicles. If the market demand for these vehicles sustains, adding more ‘Made in India’ AMGs to the local portfolio in the near future is certainly possible,” said Martin Schwenk, managing director at Mercedes-Benz India.

“The AMG GLC 43 Coupe, which is made in India, has emerged as one of our highest selling AMGs, growing by strong three digits,” he added. To be sure, the AMG models assembled in India are lower series models that provide a relatively accessible entry into Mercedes-Benz’s AMG performance division. Currently, the contribution of the AMG series to the company’s sales nationally is about 10%, and the target is to increase the share to 15% in the mid-term.

While companies are upbeat, sales of the performance range of cars fell to 1,360 in 2020 amid the pandemic from 2,718 in 2019, with Mercedes-Benz accounting for about half the numbers, according to consultancy firm Jato Dynamics.