The luxury car sector has taken several important learnings from the year 2009
2009 was expected to be a tumultuous year to say the least. The global financial system in 2008 experienced its worst crisis since a lot of us started our careers. Major financial institutions went under, while a significant number were bought up or survived only after substantial bailouts. That this was a global phenomenon made it even more worrisome. Global stock markets fell by over 50% as compared to last year and a severe liquidity & credit crunch was evident. Most developed countries were banking on emerging & developing markets like China, India, Brazil and Russia.
I have had the good fortune of being with a luxury car brand like Porsche for almost two decades now and being in a market like India during such times was a bonus. India is still a tiny contributor to Porsche’s global sales but the learning in India is at par with any global market. There are innumerable factors which contribute towards decision making when it comes to buying a luxury car, especially like ours, which, on an average, costs INR 1 Crore. In fact, it is the second most important decision after buying a home.
As many know, luxury car sales in India have been growing at a steady rate despite the slowdown. The two most important reasons, in my opinion, are the inherent financial prudence of India and a strong product strategy from luxury car manufacturers. Indian families and businesses are still not very dependent on credit – a habit that has stood them in good stead in these tough times. Domestic savings is a habit cultivated across social strata and people resort to credit as the last resort. This to my mind has been a crucial differentiator when it came to India’s recovery from the slowdown. India’s economy grew at an impressive 6% in 2009, coming down from the highs of 8-9% growth. Despite the liquidity crunch, large domestic savings and corporate earnings helped finance investment. Expansion plans slowed down but were not crippled due to lack of funds.The government played its part too and timely monetary and credit measures were introduced, which played a key role in improving private demand, liquidity and short-term rates and reducing the risk of loan losses.
2009 was expected to be a tumultuous year to say the least. The global financial system in 2008 experienced its worst crisis since a lot of us started our careers. Major financial institutions went under, while a significant number were bought up or survived only after substantial bailouts. That this was a global phenomenon made it even more worrisome. Global stock markets fell by over 50% as compared to last year and a severe liquidity & credit crunch was evident. Most developed countries were banking on emerging & developing markets like China, India, Brazil and Russia.
I have had the good fortune of being with a luxury car brand like Porsche for almost two decades now and being in a market like India during such times was a bonus. India is still a tiny contributor to Porsche’s global sales but the learning in India is at par with any global market. There are innumerable factors which contribute towards decision making when it comes to buying a luxury car, especially like ours, which, on an average, costs INR 1 Crore. In fact, it is the second most important decision after buying a home.
As many know, luxury car sales in India have been growing at a steady rate despite the slowdown. The two most important reasons, in my opinion, are the inherent financial prudence of India and a strong product strategy from luxury car manufacturers. Indian families and businesses are still not very dependent on credit – a habit that has stood them in good stead in these tough times. Domestic savings is a habit cultivated across social strata and people resort to credit as the last resort. This to my mind has been a crucial differentiator when it came to India’s recovery from the slowdown. India’s economy grew at an impressive 6% in 2009, coming down from the highs of 8-9% growth. Despite the liquidity crunch, large domestic savings and corporate earnings helped finance investment. Expansion plans slowed down but were not crippled due to lack of funds.The government played its part too and timely monetary and credit measures were introduced, which played a key role in improving private demand, liquidity and short-term rates and reducing the risk of loan losses.
Read these article :-
No comments:
Post a Comment