Big businessmen cash in on luxury car craze

With the demand for international luxury cars shifting into high gear, Indian businessmen are cashing in on the craze. Amit Burman of Dabur has signed up with German carmaker Audi for north India and is on the lookout for more brands.

Shyam and Hari Bhartia of the Jubilant Group have become Audi's dealers for south India. The Bhartias are also in talks with other luxury brands.

Delhi-based Satya Bagla has bagged the dealership for super-luxury brands like Bentley and Porsche. UK Modi distributes Volvo cars in India and Ashish Chordia is Porsche's dealer for Mumbai.

The market for luxury cars was not always so hot, with the only buyers being foreign missions and a handful of well-heeled businessmen. But the scenario has changed rapidly over the last few years.

Luxury cars are selling in large numbers in the country in spite of the 60 per cent import duty on completely built units.

Burman points out the success of DaimlerChrysler in India. In the 10 years since it set up shop in the country, the company has sold close to 10,000 Mercedes cars in India.

"It is a huge market," Burman says. He is targeting high net worth individuals -- from big farmers in Punjab to executives who draw top-notch salaries. Large taxi operators, too, are a major target.

Chordia says most of his prospective customers are Bollywood celebrities and members of business families. According to him, bookings for Porsche cars in Mumbai have already hit "double digits".

Typically, a showroom and a service centre for a luxury brand can cost up to $1 million. Though Bagla says his Bentley sales are bang on target, he calls it a long-gestation investment.

On the other hand, Burman projects he will break even in less than two years. An executive at Modi Motors says the business is "very profitable".

Automobile industry sources say the volumes in the luxury and super luxury segments do not justify local production. But the numbers are significant enough to set up dealerships.

"This will be the preferred route for cars priced above $40,000," says Dilip Chinoy, director general, the Society of Indian Automobile Manufacturers.

Some premium carmakers prefer the straight drive. BMW of Germany, for instance, is looking at setting up a plant in Gurgaon near Delhi.