Deals of Luxury vehicles are developing at a fast speed in India, so is the interest for credits to fund those buys. Banks, for example, HDFC Bank, ICICI Bank, Bank of Baroda, Hub Bank and Kotak Mahindra Bank, as well as non-bank moneylenders and hostage lenders of automakers like Mercedes-Benz and BMW are seeing a sharp spike in extravagance vehicle funding, as shoppers progressively use credits to purchase very good quality vehicles.
Outstanding bank loans to individuals for purchasing personal vehicles totalled ₹5.8 lakh crore at the end of December. While separate data weren't available on financing of luxury vehicles, executives in the banking and automotive sectors said that was a fast-growing segment of the car loan portfolios for lenders, as per economic times.
Since Covid, consumer behavior has changed, and more wealthy and upper-middle-class Indians are now willing to spend more on luxury. Demand is also being driven by the latest models from the portfolio of global luxury car manufacturers and the rising income levels of young Indians. Industry chiefs expressed a large number of these clients are taking the credit course to meet the yearning of claiming an extravagance vehicle.
As much as 60-73% of the expense of buying a vehicle from Lexus, BMW, Mercedes-Benz, Puma Land Wanderer, Audi and Volvo Vehicles in India is subsidized through credits, with the typical advance sum being ₹40 lakh to ₹73 lakh. For JLR vehicles, the normal is ₹73 lakh, while for BMW and Mercedes, it ranges ₹53-55 lakh, as per gauges from Jato Elements appraises, an auto industry knowledge firm. These vehicles cost ₹45 lakh to ₹2.5 crore.
"As the younger population becomes more affluent and aspirational, the luxury vehicle market in India is witnessing a surge driven by changing lifestyle preferences," said Ravi Bhatia, president, Jato Dynamics.