Hit hard by corona woes, economic downturn and high taxes, the sale of highly aspirational cars from companies such as Mercedes-Benz, Audi, BMW and Jaguar Land Rover slipped to an estimated 21,400 units in 2020 — a 37% decline over the nearly 34,000 units sold in 2019.
This number is the lowest since 2010 when the industry had sold 15,280 vehicles, according to data sourced from the industry. Interestingly, the share of luxury to overall passenger vehicle (cars, SUVs, MPV/UVs) sales also slipped below the 1% mark for the first time since 2010 when it used to be 0.7%.
Luxury’s contribution to overall passenger vehicle sales has generally been a little over 1% in the intervening years, though this is way lower than numbers in developed countries of the West and other emerging economies.
According to full-year numbers revealed by companies, Mercedes-Benz — the German car major that leads the category — had a fall of 43% as its volumes declined to 7,893 units against the 13,786 units it sold in 2019.
And if Mercedes’ fall seems steep, things actually became worse for compatriot Audi that saw its sales crash to 1,639 units in 2020 against 4,594 units in 2019. This is a drop of 64%, and a far cry from the near-10,000 numbers it had touched a few years ago.
For BMW, the sales declined by 31% to 6,604 units against the 9,641 units it sold in 2019. Other companies such as Jaguar Land Rover and Volvo are yet to make their numbers public.
Companies have often complained that GST tax rates on luxury vehicles are “exceedingly high” and need to be brought down gradually to drive in affordability in the category.
Martin Schwenk, MD of Mercedes-Benz, told TOI that demand has been coming back gradually as economic activity resumes and efforts to vaccinate the population gather pace.
“The summer was tough due to the lockdown, and we took quite a hit as an industry. However, as we closed 2020 and towards the fourth quarter of the year, the overall demand started to pick up. It was actually better than what anyone could have anticipated six months ago.”
Mercedes is planning a product offensive this year with as many as 15 new launches, including fresh launches and also upgrades to existing cars.
Balbir Singh Dhillon, the head of Audi in India, said there is optimism when it comes to demand.
“Our resilience was under test in 2020, but the worst is now over. We have a busy 2021 that started with the launch of new Audi A4. We will launch sedans, SUVs and performance cars this year.”
The industry has time and again petitioned the government to provide tax relief, complaining that higher prices are keeping a large number of buyers away.
India eases rules for getting new type of aircraft
The Directorate General of Civil Aviation (DGCA) has removed the requirement of giving type acceptance of aircraft for short term wet leasing (hiring with operating crew) of aircraft in a bid to improve the ease of doing business in this crippled by Covid sector.
“Wet leasing of foreign aircraft under any exigency is permitted for a limited period of three months, which is extendable for another three months. Type acceptance of an aircraft type was mandatory for import and registration of aircraft in India, (including) for short term leasing of foreign aircraft by Indian operators. This requirement has been removed,” a senior DGCA official said.
Under the subsidised regional connectivity scheme, India is opening up new routes that will require small aircraft, seaplanes and choppers. The change, brought about by amending the civil aviation requirement for “criteria for leasing of aircraft by Indian operators,” is aimed at simplifying leasing of those types of planes not seen here earlier or commonly.
The amendment does not change the maximum age requirement of 18 and 25 years for aircraft being brought in for passenger transportation and cargo operations, respectively.
“Wet, damp or dry lease is only permitted in emergency situations by DGCA. Situations cover unexpected grounding of aircraft of an existing (airline, charter operator), aircraft under unscheduled maintenance or checks or any other unforeseen circumstances. Such leases are not permitted for capacity or route expansion of an air transport (passenger) service except for cargo operations,” the amended rule says.
However, the DGCA can give exemption from the maximum age condition for bringing in aircraft. Fo instance, SpiceJet wet-leased an almost 50-year-old 15-seater DHC-6 Twin Otter seaplane from Maldivian Aero, the country’s national airline, last October for operating between Ahmedabad’s Sabarmati riverfront and Sardar Vallabhbhai Patel’s Stature of Unity in Kevadia.
Following PM Modi’s direction, Airports Authority of India is developing water ports. The Centre had last year approved subsidised flights from six water airports that include Guwahati riverfront, Nagarjuna Sagar, Shatrunjay Dam and Umrangso reservoir under the third round of ude desh ka aam nagrik (Udan) scheme.
The first to take off will be the seaplane service between Ahmedabad Sabarmati riverfront and the State of Unity.
The routes awarded for seaplane operations include Sabarmati riverfront to Stature of Unity and Shatrunjay Dam; Guwahati riverfront to Umrango reservoir, Jorhat and Shillong and Nagarjuna Sagar to Vijaywada and Hyderabad.
In August-end, the aviation ministry had approved 78 new routes under the fourth round of UDAN which could see Kavaratti water aerodrome in Lakshadweep also getting flights. Agatti, Kavaratti and Minicoy islands of Lakshadweep have also been connected by the new routes of UDAN 4.
IndiGo 8th biggest airline in terms of flights
IndiGo is currently the world’s eight biggest airline globally and Delhi Airport the 12th biggest, in terms of capacity deployment by airlines.
OAG data airlines flying between Mexico and US have deployed 33 lakh seats this month. India-UAE is at second spot with almost 10 lakh seats. Mexico-US seat deployment this January by airlines has returned to almost the same level of same month last year month with marginally 1% lower.
However, India-UAE seats deployment is 48% lower than January 2020.
Almost all big Indian carriers like IndiGo, Air India, SpiceJet, Vistara and GoAir and UAE ones like Emirates, Etihad and flydubai currently flights operate between the countries under an air bubble arrangement.
In terms of number of flights scheduled to be operated this January, American Airlines is at number one with 1.1 lakh flights (43% less than January 2020) followed by Delta, United and Southwest at a lakh, 77,000 and 62,500, respectively.
The big four US carriers are operating the maximum number of flights this month. They are followed by the three Chinese carriers — China Eastern, China Southern and Air China.
India’s IndiGo is at number 8 with 36,525 flights scheduled for this month — down 24% from January 2020.
The airports seeing airlines deploy maximum capacity in terms of seats, OAG data shows, this month are Guangzhou (over 35 lakh seats) which has displaced the pre-pandemic busiest air globally — Atlanta — to the second spot with 34 lakh seats.
The next four busiest airports are all in China — Beijing, Chengdu, Shenzhen and Chongqing. Delhi’s IGI Airport is at 12th spot with 24 lakh seats deployed by airlines, down 36% from same month last year.