India Is Learning to Spend on Luxury Without Guilt: BMW India President

I think BMW has demonstrated that if you have the right product, designed with the consumer in mind, you can perform very well. BMW has focused on two strong pillars: electrification and long wheelbase models.

Customer preferences have evolved. Many luxury buyers now want the flexibility of being driven, especially given traffic conditions. Long wheelbase models provide enhanced rear-seat comfort, legroom, and space, which customers value greatly.

We have introduced long wheelbase variants across the 3 Series and 5 Series, while models like the 7 Series and X7 already offer generous space. This combination allows customers to enjoy both driving pleasure and chauffeur-driven comfort.

The iX1, for instance, has performed extremely well because it combines both—electric mobility and a long wheelbase. EVs’ share in our sales is already at 21%. We are steadily moving towards 30% by 2030, which is a significant milestone.

This shift is positive for the environment and beneficial from a customer ownership perspective, as EVs involve lower maintenance and fewer mileage-related concerns. It is also good for the economy, as it reduces our dependence on imported fuel and oil.

There is a lot of discussion around diesel and how it is gradually declining. For us, diesel contributed about 30% to our sales in 2024. That came down to 18% in 2025. This decline is largely because our electric vehicle share has grown from 7–8% to nearly 21%. Overall, though, EV penetration in the market is around 4-4.5%.

However, the luxury segment’s overall contribution is quite small, at about 1% of the total market, so its impact on overall trends is limited.

If you look at the period before GST, the luxury segment was growing at around 10%, while the mass market was growing at about 2%. We were gradually moving upward, though I wouldn’t say GST alone added significant volumes for luxury cars.

The key reason is price elasticity. In the mass market, a price reduction of ₹30,000–40,000 can strongly influence buyers who were previously undecided. In the luxury segment, that sensitivity is far lower.

If a car priced at ₹1 crore is reduced to ₹97 lakh, it doesn’t suddenly create a new set of buyers. Someone willing to spend ₹97 lakh is generally already capable of spending ₹1 crore. As a result, the number of potential buyers does not increase dramatically.

First-time luxury buyers account for nearly 49% of our customer base—people who have never owned a luxury car before. This is a substantial proportion and higher than many other players in the segment.

We are playing a meaningful role in bringing new customers into the luxury market, and I hope more manufacturers join this segment so that the market can grow collectively.

Another important trend is the entry of younger buyers. Our average customer age is now close to 40 years, and nearly two-thirds of our customers are under 45. The luxury buyer profile is clearly getting younger.

Yes. For us, about 43% of the first time luxury car buyers are choosing EVs. If you look specifically at EV buyers, a significant share is coming from non-luxury or near-premium segments.

In the case of the iX1, that number is even higher—around 55%—largely due to its competitive pricing. Many of these customers are purchasing their first-ever luxury car, which also happens to be an electric vehicle.

Additionally, around 20% of our buyers now come from professional backgrounds such as doctors, lawyers, chartered accountants, and architects—another segment that is growing steadily.

Overall, when we combine ICE and EV buyers, nearly half of our customers today are first-time luxury car buyers.

There is a widespread perception—though not entirely true—that the cost of owning a luxury car is significantly higher than that of a mass-market vehicle. This perception has been one of the barriers to luxury adoption.

That is where models like the iX1 have worked very well for us. Being an electric vehicle, it has virtually no maintenance cost. Fuel efficiency is another perceived challenge in luxury cars because they typically come with larger engines—two to three litres—since customers expect power and performance. While mileage is not necessarily a major issue, the perception remains.

With electric vehicles, however, whether it is a luxury EV or a mass-market EV, the range is broadly similar and determined by battery capacity in kilowatt-hours. On average, the running cost comes down to about ₹1–1.5 per kilometre, depending on driving behaviour, compared to nearly ₹10 per kilometre for petrol or diesel cars. This significantly reduces the psychological burden of running costs. Combined with negligible maintenance, this becomes a strong pull factor for customers.

But the mindset of Indian consumers is gradually changing. Traditionally, spending on luxury was often associated with guilt or seen as indulgence. That mindset is slowly changing. People today feel more comfortable rewarding themselves for their hard work without feeling apologetic about it.

With a younger generation entering the market—more brand-conscious and aspirational—this change will accelerate. It is gradual, but inevitable.

Currency depreciation plays a role. It impacts our profitability because while around 50% of our production is localised, a significant number of components are still imported from Germany and Europe. When the rupee weakens against the euro, costs rise immediately.

However, from a consumer standpoint, we try not to pass on the entire cost increase. Absorbing part of the impact is important because sudden price hikes are not ideal for the market.

Yes, we are continuously evaluating that. However, localisation is not just about cost—it is also about quality. We will not compromise on quality if equivalent standards are not achievable locally.

Currently, about 95% of the cars we sell in India are locally produced, with only around 5% being fully imported. We have already come a long way, and while there is still scope to go further, localisation will continue to be a gradual and carefully managed process.

I do not see sedans fading away in luxury the way they have in the mass market. If you look at the overall market, sedans account for only about 10%. However, in the luxury segment, sedans still make up around 37–38% of our sales, which is a significant share.

SUVs are growing faster, at around 24–25%, while sedans are growing at about 4%. So yes, SUVs are clearly outperforming, but sedans are still growing.

For luxury customers, sedans remain important—especially for those who are chauffeur-driven. Ease of ingress and egress, rear-seat comfort, and the status associated with being driven in a sedan all continue to matter.

We have been growing at around 14–15% for the last four to five years, which is a very strong growth rate. I don’t think many players in India have been able to sustain growth at that level for such a long period.

We would certainly like to replicate that performance again this year, with at least double-digit growth.

We are absolutely looking at that. If you look at the competitive gap, it has been narrowing. A gap that was earlier over 2,000 units has now come down to around 1,000 units (with Mercedes Benz)—so you never know how things may evolve.

I expect the luxury segment’s share (in the overall market) to increase to about 2-2.5% by 2030. Electric vehicles will form a much larger part of the portfolio.

Diesel will continue to decline over time. Regulatory restrictions—such as the 10-year diesel usage limit in cities like Delhi—are pushing customers away from diesel. Electrification offers a more future-proof solution.

Petrol is likely to remain relatively stable at around 60–61%, while EVs will continue to grow strongly.

Of course, we cannot control what other players do, but if more manufacturers enter the segment, improve price points, and increase localisation, EV adoption will rise further. Ultimately, it depends on how much customers are willing to spend and how comfortable they feel transitioning to electric.

Our responsibility is to ensure a strong cost-of-ownership proposition over the entire lifecycle. One concern customers often have is residual value, which is why we offer structured buyback programs through BMW Financial Services. This reduces apprehension and builds confidence.

Taken together—product, pricing, financing, and ownership experience—this is what we are focusing on.

We plan to launch around 27 products next year across BMW cars, Mini, and BMW Motorrad.

Of these, six will be all-new car launches, and four will be major updates—making about ten significant launches. The remaining models will be facelifts, refreshes, and product enhancements.