Dr. Prathima M, Faculty, MBAESG India &
Ananthnag Trinath A, Luxury Management Student,
The global luxury automotive industry is one of the most valuable industries. It is emerging in countries like China, the United States, India, and some parts of Europe. This market is valued at around USD 410 Billion and it is projected that the market might grow up to USD 566 Billion in 2026. The COVID-19 pandemic has had a profound effect on the posh car market directly in the short term because the sales and production have witnessed a decline in 2020. A significant increase in disposable incomes of consumers is propelling the demand for luxury cars around the world. Some of the main players within the market are Mercedes-Benz, BMW, Lexus, Audi, Volvo, Land Rover, Jaguar, and Tesla. The other players within the market include Ferrari, Lamborghini, and Porsche.
India is a huge market for vehicles and has huge growth potential for luxury cars. However, with the spread of the COVID-19, the sales of luxury automobiles were affected and it led to lower footfalls within the showrooms. Various automobile manufacturers were forced to temporarily shut their production because the supply chain was disrupted by the country-wide lockdown imposed by the Indian Government which restrained the expansion of the market.
However, the pandemic helped these luxury automobile companies to seek out alternatives and convert their services into digital mode: which helped them to have a contactless experience and were able to serve their customers from the comfort of their homes.
Some notable cases –
➢ BMW launched an online platform “BMW Contactless Experience” which was a digital-first purchase experience for the customers. It aims to provide all the benefits, from a dealer’s point of view to the consumers with the utmost comfort level.
➢ Mercedes’ “Merc-from-home” is a quintessential online platform through which the customers can avail themselves of pre-and post-purchase services effortlessly.
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Automobile companies did launch their latest models virtually. Recently, Mercedes-Benz did a virtual launch of the new “C-Class” model on their website and social media platforms. In the media section of their website, they made a separate poster where they mentioned the details of the digital world premiere of the launch of C-Class on 23rd February 2021. Also, Audi A4, BMW 2-Series, Mercedes Benz S-Class, and Lamborghini Huracan Sto were launched digitally.
Due to this very constrained situation, the luxury automobile brands had to look for alternate possibilities to service and reach their customers digitally. Therefore, this situation was a blessing in disguise through which the companies got to know about many other options and enabled various modes for customer retention and finding new customers.