While budget buyers hold back, India’s wealthy push luxury car sales to new highs in FY25

Rising food inflation and falling wages have prompted urban consumers to hold back their car purchase plans in FY25, as evidenced by muted sales in the mass-market segment. However, the wealthy class continued their luxury shopping spree, with demand for premium cars remaining strong throughout the fiscal year.

Luxury carmakers sold 51,406 units in FY25, marking a 3% year-on-year (YoY) increase compared to 49,862 units in FY24, and setting a record for the highest sales in any fiscal year. This rise came even as the Indian economy struggled, with growth expected to hit a four-year low. 

Mercedes-Benz India led the market with 18,928 units sold, marking its best-ever fiscal performance. The company’s top-end luxury segment—including models like the S-Class, Maybach, and AMG—saw a 34% growth. Additionally, electric vehicle (EV) sales surged by 51%, with EVs comprising 7% of total sales.

Notably, the AMG G 63, Mercedes-Maybach Night Series, and the new G 580 with EQ Technology generated overwhelming demand, with the waiting period in some cases extending up to 1 year. The EV version of the Maybach has also seen strong demand.

BMW India secured the second position with 15,810 units sold, a 5% rise from 14,562 units in FY24. Jaguar Land Rover (JLR) experienced a 40% YoY growth, selling 6,183 units and surpassing Audi to become the third-largest luxury car seller in India. Previously, in calendar year 2019, JLR had briefly overtaken Audi with sales of 5,000 units compared to Audi’s 4,594, but Audi regained its third spot in 2020.

The Land Rover Defender was the top-selling model, with a 90% increase in sales. Meanwhile, the locally assembled Range Rover and Range Rover Sport SUVs also saw strong growth of 72% and 42%, respectively.

Localization efforts and improved product availability provided significant momentum. In May 2024, JLR began assembling four models at its Pune facility.

Lexus, the luxury vehicle division of Japanese automaker Toyota Motor Corporation, reported a robust 19% YoY growth in FY25. In March 2025, Lexus India recorded its highest-ever monthly sales, driven primarily by the NX and RX SUVs.

Audi and Volvo hit the brakes in FY25

Meanwhile, Audi, the German luxury car manufacturer, saw sales skid 15% to 5,990 units in India during FY25, impacted by supply chain constraints.

Volvo faced a similar challenge, with sales dropping 51% YoY to 1,750 units in FY25. The Swedish luxury carmaker, best known for its emphasis on safety, is struggling to maintain market share amid tough competition from other global brands.

Globally, the company reported 70,737 cars sold in March 2025, down 10% compared to the same period last year.

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