Bullish on India, but Lamborghini CEO is unhappy with infrastructure
What's the story
High taxation rates and poor road infrastructure are limiting the market growth of super luxury cars in India, Lamborghini's global CEO, Stephan Winkelmann, expressed such a sentiment in an interview with The Economic Times. The top boss claimed that the country's infrastructure leaves a lot to be desired. However, he was bullish about sales here, considering it is one of the brand's fastest-growing markets.
Official words
How did the top boss describe the Indian market?
Describing the challenges in India, Winkelmann said, "It's a mix. But I think the biggest challenge is the infrastructure because we are in other markets where we have (high) taxation (but) where the volumes are higher." He also claimed that the Indian market is not big enough but Indian customers worldwide are buying Lamborghini cars, especially in the US, UK, and Southeast Asia.
Figures
What do the figures say?
Lamborghini sells three models in India: Urus, the Huracan EVO, and Aventador Ultimae. Their prices fall in the Rs. 3-9 crore price bracket. In 2022, 92 cars were sold by the company here, and this year, it is targeting a three-digit sales figure. Meanwhile, globally, the Italian marque ended 2022 with record sales of 9,352 units. India's contribution to global sales was just 1%.
Information
What is the taxation policy regarding automobiles?
In India, a base 28% GST rate is levied on automobiles. There is also an extra 1-22% cess depending on the vehicle type. When it comes to fully imported cars, a customs duty of 60-100% based on factors like engine, freight charges etc. is levied.
Demand
Company growth remains stable worldwide
Winkelmann claims that Lamborghini is yet to be impacted by global inflation and recessionary trends. "The point is that we have no signs so far of markets that are weakening, we have markets that are more on and off through the year. Especially, the Chinese market. The rest of the world is very solid so far," he said. He remained bullish about India's prospects.
Planning
Lamborghini looking at India as a component supplier
Lamborghini is aware of the disruptions posed by the global geopolitical situation and is working on ways to strengthen its supply chain. The firm is also relying on its synergies with the Volkswagen Group for microchips and other critical components that are required for building its supercars. The company is also looking for new suppliers for components and India seems like a promising prospect.