BMW India Flags Impact of West Asia War on Luxury Car Market Demand

More than a month into the West Asia war, BMW Group India said the geopolitical situation has started to weigh on India’s luxury car market demand, even as the mass-market segment remains largely unaffected, with the impact already reflected in demand.

When asked about the impact of the West Asia war on the overall luxury car market, BMW Group India President & CEO Hardeep Singh Brar said the impact is visible in the January-March sales, and the luxury segment will be impacted more than mass-market segments. “There is already moderation, I would say.”

During the January-March quarter of this year, India’s overall vehicle retail sales grew in double digits, while the luxury car market grew at a modest rate of single digits, which is a moderation from the growth seen in earlier quarters.

“The total market has grown by 18% in the automotive market in quarter one. But the luxury segment has only grown by about 2%. And if you remove BMW from that, then the decline is about 2–3%,” Brar said.

“We have seen in the past that the moment there are global situations, global volatility, it impacts luxury buyers first and then the rest.”

According to him, the impact is felt earlier in the luxury car market because its customer base is more exposed to global economic volatility and tends to react cautiously during uncertain times.

He explained that a large share of luxury buyers are business owners and entrepreneurs whose incomes are closely tied to trade, exports and financial markets, making them more sensitive to geopolitical disruptions.

These customers typically postpone discretionary purchases much earlier compared to mass-market consumers when there is a global crisis. “They [customers] may be reserving their cash flow so that if anything happens, they have money to run the business,” Brar said.

However, he noted that though luxury car demand is the first to slow during global uncertainty, historically, it is usually the first segment to recover once conditions stabilise. “They are also the first ones to bounce back,” he said.

On the supply side, Brar noted that BMW Group India has so far not seen an impact, but warned of supply chain disruption if the situation prolongs.

“As of now, because we have long lead times to order our cars, I don’t see any problem because our supplies are pretty much in order. But if it continues, then yes, future models may get impacted. So supply chain disruption can happen with that.”

The automaker’s car deliveries rose 17% year-on-year in the January-March quarter to a record 4,567 units and outpaced Mercedes-Benz to become the No. 1 luxury car brand. One of the major growth drivers has been the demand for electric cars, which now accounts for around 26% of sales.

“Because of this oil crisis and a lot of negativity around oil… a lot of customers have started feeling that EV is the right way to move forward,” he said.

In 2025, BMW sold 18,000 cars. The company said it is forecasting “strong double-digit growth” in 2026.