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Hospitality Segment Influences Luxury Car Market

The term ‘hospitality’ refers to bonding between a guest and the host. The hospitality sector includes all kinds of businesses that provide a variety of services comprising of foods, beverages, and accommodation. In India, the hospitality segment is growing enormously, eventually influencing the luxury car market in India.

Indian hospitality segment including premium hotels, resorts, and tour operators are always in hunt of top-notch luxury cars to serve their guests to a plush ride. This demand of the sector has driven the demand for luxury cars in the country.

Luxury and premium class hotels keep the widest possible range of high-end cars and limousines to lead the competition in the market. These hotels and resorts compete in terms of true quality services provided to fulfill discerning customer’s wishes in every respect. The owners and management are tied with the aspirations to serve their guest with the most comfortable and luxury car based on personal choice of their guests. Whichever car their guest order, should be their in the owned fleet and none of the guest should step back with a dissatisfactory smile. All hotels are looking forward to position themselves and carve their own niches.

To fulfill the needs of their clientele hotel owners buy, lease or rent variety of luxury cars. It is believed that the hospitality sector accounts for nearly about 10% of the total luxury car sales. Some of the most popular luxury car manufacturers who sell their high-end luxury cars to luxury hotels in the country are Audi AG, Nissan, BMW, and Mercedes.

According to the industry report, a total of 4,300 luxury cars were sold to the premium hotels in the country in the fiscal 2007. BMW sells nearly about 50 cars to luxury hotels. Audi AG at an average sells 15 of its luxury cars every month comprising Audi A4, Audi A6, Audi A8 and Audi Q7.

Audi India claims that the company receives about 11.5% of its car sales from five-star hotels and other luxury car properties such as resorts and heritage hotels. The leading Nissan car, X-Trail and Teana, also receives 15% of the total car sales from hospitality sector. Mercedes-Benz with the entire range of premium or super luxury cars also sees a huge sales growth due to this growing sector.

Some of the hotel owners also import these top-notch cars to the country and save a lot on duty. The average duty on imported cars in India is 114% but fortunately hotel owners and tour operators can import completely built cars by paying only 3% import duty. This reduction in the import duty is in accordance to the Export Promotion Credit Guarantee scheme.

So, it is clear that to a large extent the success of luxury car market can be encapsulated from the hospitality segment. The segment is expected to grow with an accelerated speed, eventually pressurizing the Indian car market to deliver more of luxury cars.