After years of explosive growth, India’s luxury car market is beginning to slow down in 2026. In the first half of this year, sales of cars priced above ₹40 lakh have become flat. Uncertainty in the global market and a weak rupee have hampered demand, and brands like Mercedes-Benz, BMW, and Audi have kept up their prices (up to 2% every quarter) to attract more buyers.
But the numbers from January to May 2026 tell a tale of aspiration, evolution, and global alignment.
BMW leads the charge with 8,283 units sold to Mercedes-Benz at 7,911 units. The two German groups have nearly 81% of the luxury car market in India, and a duopoly is very strong. The competition for the top spot has never been so intense, and brand loyalty and product differentiation are very important.
Mercedes-Benz, for all of the global headwinds (changing supply chain and EV transition), has remained consistently profitable from one month to the next. Its ability to retain customer trust shows how diverse they are and what they need to do.
Jaguar is third with 2,428 units. This is especially notable given the brand’s continued evolution from an all-electric luxury brand into an all-electric luxury brand. India is still a major market for Jaguar Land Rover as it attempts to remake itself globally as an EV house of the future.
Volvo, with 726 units, epitomizes the growing desire for Scandinavian design and safety-first luxury in India. So the brand’s focus on sustainability resonates with a lot of premium buyers in Tier-1 cities and is well positioned for the next wave of demand.
As such, Tesla’s debut in India has been promising but modest at 198 units sold in 5 months. Pricing issues, charging infrastructure, and homologation challenges remain a barrier. The potential is immense, but how this is executed will determine Tesla’s future in India’s rapidly changing luxury electric vehicle market.
The ultra-luxury is still niche by design. Rolls-Royce (21 units), Ferrari (18 units), Maserati (16 units), and Lexus (12 units) thrive on exclusivity rather than scale. With India’s ultra-high-net-worth individual (UHNWI) population growing at ~6% annually, these brands continue to cater to a select clientele.
In total, almost 19,879 luxury units were sold across India in the first five months of 2026. It shows that India is no longer just an “emerging” luxury market - it has arrived. Rising wealth among HNWIs, easier financing, younger buyer demographics, and experiential consumption are driving structural tailwinds.
In global terms, as China’s luxury auto demand softens and Western markets struggle with EV adoption fatigue, global OEMs are doubling down on India. We expect more India-specific launches, localized assembly expansion, and aggressive product localization in the second half of 2026.
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