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Jan 2017 Trends

Published on: 2017-01-20 14:23:19     1718 times read    0  Comments
Ride of Luxury with Premium Cars

Sleek and attention grabbing vehicles have created a new niche market of luxury and premium four-wheelers in the recent years.  

--BY AASHIYANA ADHIKARI

Moving upmarket and selling premium cars has become a winning business strategy for many Nepali automobile dealers in the recent years. With the gradual increase in the number of customers looking for luxury cars, various premium four-wheeler brands have entered the domestic market. “Changing lifestyle with increasing need to show off are the main reasons for people opting for premium cars,” thinks Rupesh Sharma Bhatta, Assistant General Manager of Laxmi InterContinental, the authorised distributor of Korean car brand Hyundai in Nepal. He says that seeing big opportunities many dealers have started to enter the luxury car segment by introducing new premium cars in the market.

While mostly the cars sold here are of budget and mid-range segment, there are affluent buyers including business honchos and corporate heads looking for optimal level of comfort and luxury along with a dash of style and class in their rides. Similarly, some high level government agencies along with foreign diplomatic missions in the country are also the customers of premium vehicles, according to the dealers.  

Luxury or premium vehicle is generally a marketing term for a four-wheeler that provides pleasant and desirable features at an increased expense. “Premium cars are the best option for people with high level of disposable incomes who are careful for what they chose to buy and look for optimal level of safety in their rides,” says Bhatta.  Constructed with high quality materials, sleek build design along with luxurious interiors with sumptuous leather seats and incorporation of high-end safety and other features such as audio and video are essential in making riders of such vehicles happy. On top of these aspects comes the precise and responsive handling that modern suspension systems offer. "Luxury cars also benefit because the brands excel when it comes to safety and have enough credibility for consumers to splurge on new innovations," mentions Annie Gardner Vaidya, Managing Director of Vijay Motors, the authorised distributor of Subaru automobiles in Nepal. She thinks that owning a premium vehicle is also about having the money to buy it. “It’s about being able to say how successful the owner is," she adds. 

While the number of premium four-wheelers on the roads of Nepal is far off when compared to the cars of budget and mid-range segments at present, there is a sizeable number of high-end cars and SUVs being traded in the market, though the availability of actual data is scarce. Kishore Gears, the authorised distributor of Jaguar Land Rover in Nepal informs that 250 units of Land Rovers are currently running on the roads since the company first started the sales of the British SUV brand in 2005. The company also deals in other European luxury vehicles brands including Jaguar car, Mercedes and Peugeot. Similarly, sales of Subaru have also risen in the recent years, as per Vijay Motors. “We have already sold 18 units of this car this year. Last year the number was 12,” informs Bijay Sharma of Vijay Motors. 

Kathmandu valley is the single largest market for premium four-wheelers in the country. As per Kishore Gears, the company has only sold 10-12 Land Rovers outside the valley till date. Similarly, Subaru has been selling only 2-3 cars annually in other parts of the country. “Even the elites living outside capital do not want to spend hefty sum of money on luxury brands,” he shares. Given the country’s uncertain political environment and lack of proper security in many parts of the nation, it is likely that affluent buyers outside Kathmandu are reluctant to purchase premium vehicles, market analysts say. “Premium cars are rare even in major cities except the capital valley,” mentions Bhatta.

The increasing sales of premium cars in Nepal have led to the growing after sale services and availability of spare parts in the recent years which was difficult for vehicle owners in the past. "For premium cars, it can be estimated that after-sales services can generate between 20-30 per cent of total sales if correctly managed," says a representative from Kishore Gears, adding, "The bulk of the margin does not come from the direct repairs but from the sales of spare parts. The margin of spare parts can be more than 50 per cent alongside the support and warranty contracts that can be up to 75 per cent. So, the after sale services provided to the premium cars are different and better than those of budget and mid-range  four-wheelers.” 

As per the dealers, the price of premium and luxury cars and SUVs available in Nepal starts at around Rs 6-7 million and goes up to Rs 30 million. Hyundai, for instance, has been selling Tucson and Santa Fe range of four-wheelers under its premium car segment. Its Tucson GLS Petrol and Tucson GLS Diesel carry price tags of Rs 9.29 million and Rs 10.29 million respectively. Meanwhile, Santa Fe GLS Diesel and Santa Fe GLS Diesel Plus are priced Rs 12.29 million and Rs 12.89 million respectively. Similarly, another Korean brand SsangYong under the dealership of IMS Motors launched XLV, Korando, Acyton Sports and Rexton range of SsangYong luxury SUVs and pickups few months back. Among them the Rexton is the exclusive SsangYong SUV brand with two models- Rexton MT Semi Loaded and Rexton Fully Loaded -- priced at Rs 10.27 million and Rs 10.97 million respectively. 

Japanese brands have been maintaining a strong level of presence in the premium vehicle market here.  The iconic Toyota Land Cruiser is considered among the priciest SUVs in the Nepali market. Its 200 and GX variants are available at Rs 27 million and Rs 21 million respectively. The Japanese vehicle brand also sells Land Cruiser Prado VX (Rs 20.7 million), Prado (Rs 15.5 million), Fortuner (Rs 10.9 million), Camry (Rs 9.61 million), Rav4 (Rs 9.18 million) and Corolla LX (Rs 7.25 million) in Nepal. Honda also has notable presence in the premium segment with its Crv-RVSI (Rs 9.5 million), Accord (Rs 78.50 million) and CR-V (Rs 7.6 million) cars and SUVs. Similarly, Mitsubishi has been selling SUVs such as Pajero GIS (Rs 13 million), Pajero Sports (Rs 8.5 million), Outlander (Rs 8.4 million), ASX (Rs 8.37 million) alongside the compact sedan Lancer GLX (Rs 6.6 million) in the premium segment. Likewise, Subaru is present here with its two SUV models namely, Forester (Rs 9.4 million) and Crosstrek XV (Rs 8.4 million). 

Meanwhile, Volkswagen has a range of four-wheelers in the segment.  The German car brand has been selling Volkswagen Touareg (Rs 16.2 million), Tiguan Diesel (Rs 9.5 million), Passat CC (Rs 9.45 million) and Passat (Rs 8.9 million) to its Nepali customers. Another German brand Mercedes currently has two premium cars in the Nepali market. It’s Benz GLE 350D 4MATIC (Rs 26 million) and E 200 (Rs 21 million) are available to the deep pocketed and class conscious Nepalis. Meanwhile French car brand Peugeot is also present in Nepal with its attention grabbing coupe RCZ (Rs 12.5 million), 308CC (Rs 11 million) and 3008 (Rs 8.7 million) models. 

Czech automobile brand Škoda has also been selling luxury cars in the market. “Priced at Rs 8.19 million, Škoda Octavia Elegance is the most exclusive Skoda four-wheeler available here," says a representative of MAW Enterprises, the authorised dealer of Skoda in Nepal. The company is also selling Škoda Octavia Ambition and Škoda Yeti Elegance in its premium segment carrying price tags of Rs 7.19 million and Rs 7.75 million respectively.

Over the years, luxury cars have progressively shown great value for money and the popularity of these four-wheelers is rising gradually in the Nepali market. Auto dealers are expecting a notable number of premium and luxury cars running on the roads as the market is witnessing a notable shift regarding the demand of automobile at present. "Within the next five years, we will be seeing large number of premium vehicles on the roads," says Bhatta.


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