India luxury car market experiences shift as mainstream brands gain ground

…out E25-compliant cars amid biofuel push 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…

…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…

…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…