India Luxury Car Market

India Luxury Car Market Size and Share:

The India luxury car market size was valued at USD 1.20 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 1.91 Billion by 2033, exhibiting a CAGR of 5.30% from 2025-2033. West and Central India currently dominate the market driven by rapid urbanization and infrastructure development in emerging economies, the growing middle-class population resulting in the increasing demand for premium vehicles, and continual innovations in automotive technology such as advanced safety features and hybrid engines further increasing the India luxury car market share.

The growing number of high-net-worth individuals (HNWIs) and upper-middle-class consumers in India is a significant driver for the luxury car market. As disposable incomes rise, more consumers are investing in premium automobiles for status, comfort, and cutting-edge technology. India’s expanding economy and increasing urbanization continue to generate wealth, creating a broader base of affluent buyers. This preference for exclusivity and premium experiences is evident in the luxury car segment's performance, with sales reaching a record 48,000 units in 2023—a 20% year-on-year increase. The surge in demand directly aligns with the rise in HNWIs, highlighting luxury cars as a growing symbol of success and lifestyle aspiration in modern India.

Indian consumers are increasingly valuing luxury, quality, and technology in their vehicle purchases, driven by global exposure and rising aspirations. This shift has led to a growing demand for luxury cars with advanced features, superior design, and enhanced driving experiences. The younger, tech-savvy generation especially favors vehicles with cutting-edge infotainment, safety technologies, and eco-friendly options like electric models. Reflecting this trend, the luxury EV segment saw a 61% year-on-year growth in Q1 2025, with around 1,100 units sold. A significant share of these were first-time buyers from Tier-II cities. Global luxury brands are responding to this evolving demand, aligning their offerings with the tastes of modern Indian consumers and further boosting market growth.

India Luxury Car Market Trends:

Rising disposable income and affluent middle-class

Inflating disposable income levels and considerable growth in the affluent middle-class population are propelling the market in IBy 2047, the middle class in India is expected to make up 61% of the country's entire population, according to the India Brand Equity Foundation (IBEF). The fast-growing economy is catering to a growing number of high-net-worth individuals and households with funds at their command to be spent. It is a demographic structural shift that is creating a perfect platform for the sale of luxury products, of which cars form a prime segment. With this, the increasing demand for a comfortable, high-tech, and high-status automobile is on the rise because of the growing number of millionaires because of the overall increase in financial stability. Luxury cars carry an aspirational value that has helped drive this trend, with consumers willing to pay for products that symbolize their social status and level of success. Thus, the aspiration in terms of a better lifestyle and more disposable money are two key drivers fueling the industry in India.

Urbanization and infrastructure development

Urbanization and infrastructure development activities at a rapid pace are playing a key role in driving the India luxury car market growth. Increasing at a fast rate, urbanization is leading to an increase in metropolitan cities and tier-2 cities, which is making them key economic activity hubs. According to the World Bank Group, by 2036, India's towns and cities are expected to be home to 600 million people, approximately 40% of the total population. Better infrastructure in the form of roadways, upgraded parking facilities, and convenient connectivity are making it increasingly possible and attractive for consumers to own and keep a luxury car. Therefore, this is driving the market throughout the nation. Besides this, the expansion of luxury automobile dealerships and service centers throughout urban areas is facilitating convenient access to such brands. Adding to this urban expansion is a heightened desire for lifestyles and mobility requirements, which is also fueling the India luxury car demand.

Technological advancements and product innovation

Technological advancement and product development are the key drivers of the India luxury car market outlook. Continuously introducing newer variants with newer innovative technologies brings variety to the range, for example, advanced safety systems, autonomous driving capability, more sophisticated entertainment systems, improved performance specifications, and dynamics. Such innovations in products support meeting the new tastes and requirements of the luxurious consumer seeking the best in motor vehicle technology and luxury. So, this is serving as one of the primary India luxury motor vehicle market recent opportunities. Excluding this, luxury motor vehicle companies are exploring electric motor vehicles and environmentally friendly motor vehicle solutions, driven by the fast-accelerating demand for clean transport. The India Brand Equity Foundation estimates India's EV market to expand from USD 3.21 Billion in 2022 to USD 113.99 Billion in 2029, with an impressive CAGR of 66.52%. This concentration provides exclusivity and a space for cutting-edge technology and fresh bright ideas, and luxury cars become appealing to affluent buyers and technologically advanced consumers environmentally friendly consumers.

India Luxury Car Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India Luxury Car market, along with forecast at the regional, and country levels from 2025-2033. The market has been categorized based on vehicle type, fuel type, price range, and engine capacity.

Analysis by Vehicle Type:

• Hatchback
• Sedan
• Sports Utility Vehicle

Sedans account for the majority of shares in India’s luxury car market due to their elegant design, superior comfort, and prestige appeal. Traditionally seen as a symbol of status and sophistication, sedans offer a smooth ride quality, spacious interiors, and advanced features that cater to the expectations of luxury car buyers. Their sleek styling and aerodynamic performance also make them a preferred choice among urban professionals and business leaders. Additionally, luxury sedans often come equipped with high-end technology and premium materials, enhancing the overall ownership experience. While SUVs are gaining traction, sedans continue to dominate due to their established image as executive vehicles, especially in metro cities where road infrastructure supports their usage effectively.

Analysis by Fuel Type:

• Gasoline
• Diesel
• Electric

Based on the India luxury car market forecast, the gasoline remains the leading segment in India’s luxury car market due to their refined performance, smoother driving experience, and quieter operation, which align well with luxury car buyers’ expectations. With stricter emission norms and the gradual phase-out of diesel vehicles in many cities, consumers are shifting preferences towards cleaner alternatives like gasoline. Additionally, the lower maintenance cost and better availability of gasoline fuel across urban and semi-urban areas add to its appeal. Luxury car manufacturers also offer a wider variety of gasoline-powered models, providing customers with more choices in terms of performance and design. Overall, these factors contribute to gasoline's dominance in the premium vehicle segment.

Analysis by Price Range:

• Entry-Level
• Mid-Level
• High-End
• Ultra

Entry-level luxury cars cater to first-time premium buyers seeking brand prestige at a relatively accessible price. These models offer essential luxury features, refined interiors, and a premium feel while maintaining cost-efficiency. They serve as an entry point into luxury ownership, often attracting young professionals and aspirational consumers.

Also, the mid-level luxury vehicles balance performance, comfort, and advanced technology. Priced higher than entry-level models, they offer enhanced features such as superior infotainment systems, safety technologies, and refined design. This segment appeals to established professionals and growing families looking for a more comprehensive luxury experience without entering ultra-premium territory.

Moreover, the high-end luxury cars emphasize powerful performance, cutting-edge innovation, and top-tier comfort. These vehicles often include bespoke interiors, advanced driver assistance systems, and a prestigious brand presence. Buyers in this segment seek exclusivity, superior craftsmanship, and an elevated status symbol, typically being experienced luxury consumers or business elites.

Besides this, the ultra-luxury vehicles represent the pinnacle of automotive opulence, combining extreme customization, limited production, and unmatched attention to detail. These cars offer elite status, handcrafted elements, and advanced tech, often exceeding conventional expectations. Buyers are typically ultra-high-net-worth individuals seeking uniqueness, heritage, and the ultimate in luxury mobility.

Analysis by Engine Capacity:

• Upto 3,000 CC
• Above 3,000 CC

Luxury cars with engine capacities up to 3,000 cc are popular for their balance of performance, fuel efficiency, and lower tax implications in India. These models appeal to urban buyers seeking refined power and smoother driving experiences, making them ideal for city commuting and occasional long-distance travel.

Apart from this, the vehicles with engine capacities above 3,000 cc cater to enthusiasts and affluent buyers seeking superior performance, speed, and road presence. These models often feature advanced engineering, powerful acceleration, and enhanced driving dynamics. Positioned in the premium and ultra-luxury segments, they symbolize status and exclusivity, often chosen for their prestige and thrill.

Analysis by Region:

• North India
• West and Central India
• South India
• East India

West and Central India lead the luxury car market due to a combination of strong economic growth, urbanization, and a high concentration of affluent individuals. Major cities like Mumbai, Pune, Ahmedabad, and Indore act as economic hubs with a rising number of high-income professionals, entrepreneurs, and industrialists who drive demand for premium vehicles. The region boasts well-developed infrastructure, better road networks, and access to top-tier automotive showrooms and service centers, enhancing the luxury car ownership experience. Additionally, increasing lifestyle aspirations, exposure to global trends, and a preference for status symbols fuel the desire for high-end automobiles. The presence of large corporate offices, financial institutions, and a thriving real estate sector also contributes to sustained demand in this region.

Competitive Landscape:

The competitive landscape of India's luxury car market is characterized by a mix of global and domestic players vying for market share. Leading international brands dominate the high-end segment, offering a range of premium models with advanced features, superior performance, and exclusivity. These brands focus on product innovation, cutting-edge technology, and customization options to appeal to affluent customers. Domestic players are also becoming more competitive by introducing luxury models and expanding their presence in tier-2 and tier-3 cities. Additionally, the rise of electric luxury vehicles is reshaping competition, with brands exploring sustainable mobility solutions to meet changing consumer preferences. Price sensitivity remains a key factor, as manufacturers balance luxury with value to cater to India's emerging affluent class.

The report provides a comprehensive analysis of the competitive landscape in the India luxury car market with detailed profiles of all major companies, including:

• Mercedes-Benz
• BMW
• Audi
• Jaguar Land Rover

Latest News and Developments:

• February 2025: BMW launched its 3 Series Long Wheelbase in India, featuring the longest car in its segment and the most powerful petrol engine in its class. Locally produced in Chennai, the car offers features, such as Park Assistant Plus, BMW Driving Assistant, and BMW Digital Key Plus.
• February 2025: Audi India launched the RS Q8 Performance SUV. Powered by a 4-litre V8 engine, it delivers 640 HP and 850 Nm of torque, making it the most powerful SUV in Audi's lineup. The RS Q8 has a top speed of 305 km per hour.
• January 2025: Mercedes-Benz India announced plans to launch eight new models in India in 2025, focusing on top-end vehicles (TEVs) and battery electric vehicles (BEVs). The first launch I expected to be the AMG GLE 53 Coupe.
• December 2024: Jaguar announced that it plans to launch its all-electric 4-door GT in India between late 2026 and early 2027.
• July 2024: Mercedes-Benz India introduced flexible financial solutions named 'Step-up EMI' and 'EMI Holiday' to cater to the varying needs of customers. The company also launched 'Wishbox', which provides personalized financial solutions for aspiring customers based on their financial requirements.

India Luxury Car Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India Luxury Car market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India Luxury Car market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India Luxury Car industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.