India’s luxury vehicle market is expanding, although growth is becoming increasingly concentrated within brands, products and customer groups.
Luxury carmakers sold approximately 51,400 vehicles in FY2025, up 3% year on year and the highest annual volume recorded by the segment at the time.
Luxury-vehicle sales increased 4% in H1 2026, with Mercedes-Benz and BMW both recording their strongest first-half performances.
A luxury vehicle market assessment can help automotive companies determine where affluent demand is developing, which customer groups are entering the segment, how brand preferences are changing and which premium vehicle categories offer the strongest commercial potential.
Affluence Is Expanding the Luxury Customer Base
Luxury demand in India is no longer confined to established high-net-worth buyers. Younger professionals, startup founders and first-time luxury buyers are becoming an increasingly important customer group.
This broadening of the buyer pool is changing the structure of demand.
A first-time luxury buyer may enter through a relatively accessible premium model, while an established luxury owner may upgrade toward a larger SUV, long-wheelbase vehicle or high-performance product.
These customers have different purchase motivations and price sensitivities.
For brands, the distinction matters because growth in the number of affluent buyers does not translate evenly across the product portfolio.
Premiumization Is Happening at Multiple Price Points
The luxury market is becoming increasingly differentiated by price.
Mercedes-Benz, for example, recorded 19,363 units in FY2026, while vehicles priced above ₹1.5 crore grew 16%. Entry-level models declined during the same period.
This points to a shift in value creation. Unit growth can remain moderate while higher-value products contribute disproportionately to revenue and profitability.
BMW recorded 17,301 units in FY2026, with models such as the 5 Series LWB and iX1 LWB contributing to its portfolio performance.
For automotive companies assessing the luxury market, volume alone provides an incomplete picture. Price band, model mix and customer value also determine where the opportunity lies.
Luxury Sedans Still Have a Role.
SUVs continue to influence premium product strategies, but luxury demand has not simply followed the mass-market shift toward SUVs.
Luxury sedans accounted for 28.4% of luxury vehicle sales in India in 2026, compared with 8.3% of the mass-market segment.
Long-wheelbase sedans, executive cars and premium performance models continue to attract buyers who place greater emphasis on rear-seat comfort, refinement, brand status and driving characteristics.
SUVs, meanwhile, have created significant growth opportunities for luxury brands. JLR’s FY2025 performance was supported by 90% growth in Defender sales, while Range Rover and Range Rover Sport sales grew 72% and 42%, respectively.
The premium opportunity therefore spans multiple body styles, with demand varying by customer profile and product positioning.
Brand Preference Is Becoming More Product-Specific
Competition within India’s luxury market remains concentrated among a relatively small number of brands, but their growth profiles are diverging.
In FY2026, Mercedes-Benz sold 19,363 units, BMW 17,301, and JLR 5,698. BMW recorded the strongest growth among the three at 14.47%, while JLR grew 6.5%.
In H1 2026, Mercedes-Benz recorded 9,768 units, while BMW reached 9,075 units. BMW’s luxury EV sales also increased 78% during the period.
Brand preference is increasingly connected to the product experience surrounding the brand: vehicle design, technology, electrification, model availability, pricing, financing and ownership experience.
For a manufacturer considering expansion, understanding the reasons behind brand preference can be more valuable than simply measuring market share.
Where Is the Luxury Vehicle Opportunity Concentrated?
The opportunity varies considerably by customer and product segment.
A market assessment can examine:
- Affluent customer growth by geography and income profile
- First-time versus repeat luxury buyers
- Price-band movement and premiumization
- SUV, sedan and other body-style preferences
- ICE, hybrid and EV adoption
- Brand and model consideration
- Dealer and service-network availability
- Competitive intensity by market
This can reveal markets where affluent demand is expanding but luxury-vehicle penetration remains relatively low, as well as markets where demand is already strong but competition makes entry more difficult.
The distinction is important for OEMs evaluating market expansion, suppliers assessing premium-component demand and investors considering capacity or distribution opportunities.
Nexdigm’s Luxury Vehicle Market Assessment
Nexdigm’s Market Assessment can evaluate luxury vehicle opportunities across market attractiveness, affluent-customer demand, brand and product positioning, and commercial opportunity.
- Market attractiveness examines luxury-vehicle volumes, growth rates, affluent-consumer base and premiumization potential across priority markets.
- Customer demand assesses buyer profiles, first-time luxury adoption, upgrade behaviour, affordability and purchase motivations.
- Brand and product positioning evaluates market shares, model mix, pricing, body-style preferences, powertrain adoption and competitive differentiation.
- Commercial opportunity sizes addressable demand and considers market accessibility, competitive intensity and product-market fit.
The framework can incorporate regional wealth indicators, vehicle registrations, competitive intelligence, pricing and OEM product pipelines to identify the markets and customer segments with stronger potential.
The output can support decisions around market entry, portfolio expansion, product launches, dealership investment, localisation and capacity planning.
Nexdigm’s Luxury Vehicle Assessment
Nexdigm assessed luxury-vehicle demand across eight markets and four premium price bands for an automotive client. The analysis identified five high-potential market-segment combinations, representing approximately US$46 million in annual addressable demand. The findings supported prioritization of three markets and two product categories for further evaluation.
India’s luxury vehicle market is expanding alongside a broader increase in affluent consumers, but demand is becoming more differentiated by customer profile, price, body style, powertrain and brand.
A structured luxury vehicle market assessment can help automotive companies identify where premium demand is developing, understand the drivers behind brand and product preference, and prioritize markets where the commercial opportunity is strongest.
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Harsh Mittal
+91-8422857704
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