Premium cars need Advertising on TV, Print and Radio - Abhishek Puri

We cannot completely say that Mass Advertising is the step forward for the Premium car category in India. The Indian luxury car market is estimated to be around 23,000 units in about 1 per cent of the passenger vehicle market in India. But  is estimated to grow at a CAGR of 25 per cent for the next eight years to touch 1,50,000 units by 2020. Contrast this, with a scenario where overall passenger vehicles are expected to grow by 10-12 percent.  The annual World Wealth Report (2011) of Merrill Lynch Wealth Management and Capgemini, suggests, India has the world’s 12th largest High Networth Individuals (HNI) population with a growth rate of at 20.8 per cent.

Also the changing dynamics of this market have brought in a new segmentation for the luxury car market. While the entry range (20-30 lakhs) has become big and still shows a tremendous opportunity it is expected to provide gateways for expansion to the middle segment (Jaguar Land Rover segment). However, further still is the highly premium cars (above 1 crore INR).

In parallel to this are the media/advertising spends of the players in these segments. According to pitchonnet.com, the media spends of all the luxury cars in India is estimated to be approximately Rs. 200 crore while the BTL spends are estimated to be Rs. 125-150 crore. Thus while the entry segment has been quite receptive to media spends, the middle segment and higher segments might not agree with mass advertising as away to promote the brand. Marketers these days have thus transitioned to more sophisticated methods like the digital medium where a majority of their customer base is expected to be present. For example the latest campaign of Mercedes-Benz where in it launched an Ipad app to allow its potential customers to customize their cars before ordering. Many others like BMW and Audi have also developed similar campaigns. Thus while mass advertising might be useful for the entry segment and for areas where the companies do not have showrooms they cannot be regarded as major promotion media to be used by luxury car makers.