When luxury carmaker Mercedes-Benz inaugurated its first Northeast dealership in Guwahati early this month, it delivered cars to 20 customers on Day 1. These bookings were done over a month before the opening on
December 7. The country’s biggest player in the luxury car segment, Mercedes, along with Audi and BMW, has of late discovered the rising significance of this hitherto underserved market.
A total of 350-400 luxury cars is estimated to be sold annually in the Northeastern states, primarily Assam. This is a small share, considering approximately 35,000 luxury vehicles get sold in the country every year. But, companies, eager to grow volumes, do not want to let go of any growth opportunity. Luxury carmakers have faced challenges in the National Capital Region, the biggest market in the past one year, due to an eight-month ban (by Supreme Court) on the sale of 2,000cc diesel vehicles.
“Guwahati remains the gateway and a commercial hub of the entire Northeast, which is gradually emerging as a potential luxury car market. Our burgeoning customer base in this region has convinced us that it is the right time for Mercedes-Benz to expand its presence in the Northeast,” said Roland Folger, managing director and chief executive officer at Mercedes-Benz.
More than a hundred Mercedes cars are present in the region. Folger expects this number to double within a year. “Assam is famous for its tea industry and the oil sector is also significant. The local business community’s affinity towards luxury will drive this growth,” Folger said. The sales, service and spares dealership of Mercedes is spread over 36,000 sq ft.
Until March last year, when Audi opened its first outlet in Guwahati, the entire market was being served by dealerships based out of Kolkata and Bhubaneswar. However, the cars purchased by buyers in Northeast could not come all the way to Kolkata to be serviced in a company-owned service centre. This limited the interest of many potential buyers.
Northeast India was an emerging and growing market and looking at Audi’s strong acceptance in this region, Audi India had introduced the first luxury car showroom in Guwahati to strengthen foothold in this region, Audi said in response to an e-mail.
BMW is learnt to be working on its first dealership in the Northeastern region, though the company did not confirm or deny it. “Northeast is certainly one of the most important markets in India and continues to play an important role in BMW’s growth strategy. We believe the region has tremendous potential for the luxury car market in India,” said a company spokesperson.