TL;DR
Luxury car sales in India saw a significant slowdown in 2025, growing by only 1.6% due to global economic uncertainties, though a rebound is expected in 2026 aided by GST reforms.
India's luxury car market experienced a notable slowdown in sales growth during 2025, with an estimated rise of just 1.6% to approximately 52,000 units. This represents the weakest growth rate since the pandemic, a trend attributed to a combination of geopolitical uncertainties, volatile stock markets, and increased cost pressures from a weakening Indian Rupee. This performance stands in contrast to the overall passenger vehicle market, which is expected to grow by 10.5% to a record 4.6 million units.
Despite the current challenges, industry leaders from prominent luxury brands like Audi, Mercedes-Benz, and BMW anticipate a rebound to sustainable growth in 2026. This optimism is fueled by recent GST reforms, which saw tax rates on luxury vehicles reduced to 40% from the previous 43-50%, and an expected improvement in macroeconomic clarity. The slowdown highlights the luxury segment's sensitivity to economic volatility and currency fluctuations, signaling a cautious consumer sentiment among high-income buyers.
