Will the Increasing Fuel Prices Impact the Sales of Premium Cars in India?

Is Covid-19 pandemic and rising oil prices hurting the premium car brands? Let see in the following story.

Will fuel prices impact luxury car brands

It’s a kind of double whammy for the auto sector in these testing times. First, the Covid-19 pandemic and second, the non-stop fuel price hike in the country. Both these hard knocks are running parallel and shaking the auto industry as well as the buyers.

However, despite the rising inflation and people losing their jobs, it seems the car sales, especially in the premium category is witnessing an uptick. From German car brands to Jaguar Land Rover, Volvo, Bentley and Lamborghini, all these brands seem unperturbed due to the Covid pandemic and oil price hike. Will this trend continue in future or water down? Let’s try to find out.

Negative impact on the auto industry

Presently, India’s fuel prices are highest among the neighbouring countries, and the prices are expected to surge further in the coming days. High petrol and diesel prices could severely derail the economy by rising retail inflation and making many essential commodities costlier. This could also force people to lower their vehicle usage, which in turn, could also slow down the demand for vehicles in future.

Tentative perception

Though the past couple of months were fruitful for the luxury car brands, the current perception about sales is still tentative among these manufacturers. Several manufacturers believe that coming months around the festive season could desist the buyers from purchase in the backdrop of the third wave. And if the oil prices continue to rise in September-October, it could affect the sales.

Building of Positive Momentum

As per many luxury carmakers, customer sentiments are bouncing back to the market, and as economic activities gradually restoring after the ease of lockdown, the trend could work in favour of the companies. Many automakers are confident enough to register good sales numbers in the coming quarters. However, for this to work, there should be a favourable cut in the oil prices.

Launch of new vehicles

Despite the rising oil prices and the Covid-19 pandemic, the luxury carmakers continued their new launch streaks, which has put them in a better position. Where Audi launched e-tron and e-tron Sportsback, Mercedes launched second-generation GLA, E63 AMG, E53 AMG, GLS Maybach 600 and New S-Class in the market. BMW launched its M5 facelift, Lamborghini introduced Huracan STO, while Jaguar launched the F-Pace facelift.

All these new launches have driven the sales of the luxury car segment. Apart from this, online sales put their fair contribution in pushing up the sales.

Tax-cutting has become inevitable

The luxury carmakers might be cheering from the instant relief in the previous couple of months however, if the government continues to neglect the surging oil prices and high excise duty, it could affect the revenues of the luxury segment ahead.


Rising oil prices is undoubtedly a burning issue in the country. However, for luxury car lovers, the oil price hike might not pose a severe challenge unless there is a major roadblock in economic activities due to the looming third wave of Covid-19.

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