Swedish automaker, Volvo Car Corp, which is being sold by its owner Ford Motor Co to China's Zhejiang Geely Holding Group, expects India's luxury-car market to triple by 2015.
Cars priced at more than Rs2.5 million may comprise 1.5 per cent of industrywide sales in five years with total country-wide registrations reaching between 2.5 million to 3 million units annually, according to Paul de Voijs, managing director of Volvo's India unit.
India has become a hot destination for luxury car makers as rising incomes fuel demand for upmarket vehicles. German luxury car makers Volvo, Bayerische Motoren Werke AG (BMW) and Daimler AG have been quick to capitalise on the trend and have introduced new luxury cars in the world's second-fastest growing major economy.
The number of people with more than $1 million in financial assets is estimated to surge by 2018 to three times the estimated 84,000 in 2008, according to Capgemini SA and Merrill Lynch Wealth Management.
''There is still a large untapped demand for luxury cars in India,'' said Voijs. ''I have seen people with 12 luxury cars in a family in India. It shows there is a lot of wealth and lot of possibility for further growth.''
According to Voijs, Volvo has plans to start selling two new models in India by 2011, of which, one will start selling in the first half of this year.