Luxury car imports enter the slow lane

Popular models such as the BMW's flagship sport utility vehicle (SUV) X6 and the 7Series saloon, Mercedes Benz's SL-Class and SKL-Class sports cars, Toyota's Land Cruiser & Prado, Mitsubishi's Montero and Honda's CR-V have delivery lags of three months or more.

Declining demand and fluctuation in currency rates have forced Japanese carmaker Honda to stop imports of its CRV sports utility vehicle, once the largest-selling petrol SUV in India. It is now shipped to India against confirmed orders from customers who have to wait for up to three months to drive the car home. Honda did not sell a single vehicle in the April-June period.

"The changes in currencies have worked against imports. It led to an increase of almost Rs 3 lakh in the price of a CR-V forcing us to change our policy and to bring cars for a few guaranteed bookings," said Masahiro Takedagawa, president and chief executive of Honda Siel Cars India.

Similarly, Toyota's hot-selling Camry and its two SUVs, Prado and Land Cruiser, come only on direct customer booking as the company is avoiding inventory buildup of SUVs priced at Rs 40-80 lakh. "These vehicles are fully imported and carry a high custom duty. We avoid inventory at our warehouses or the dealer level," Toyota Kirloskar Motors deputy managing director (marketing) Sandeep Singh said.

The global downturn has impacted the sale of luxury cars in India. Most of these vehicles come in the price range of Rs 25 lakh to Rs 1.5 crore. The most expensive cars such as the Bentley and the Rolls Royce have a longer waiting period. These customised vehicles take six months to reach the customer. Sluggish domestic market has made a dent on the sales of high-value sedans and SUVs. Sales of such vehicles fell 22% to 1977 units in the first three months of the fiscal year.

Companies have already burnt their fingers by selling the inventory at a discount. "In past, we have sold piled up stocks at a discount. We are avoiding that situation now," a BMW India spokesperson said. Mercedes-Benz India has opted to keep its M-Class, the sportier SL-Class and SKL-Class under the customer orders category. Troubled American car maker General Motors imports its Captiva SUV only when the customers pay for the vehicle.