The rupee depreciation seems to have had a negative impact on India’s wealthy, who have been deferring purchases of their personal luxury lifestyle transportation such as private jets, yachts and super luxury cars.
“We have a very strong pipeline in the aviation business but right now we are seeing a slowdown,“ said Nigel Harwood, president & CEO, InterGlobe Established, a luxury lifestyle solution provider, which counts RIL chairman Mukesh Ambani and Essar chairman Shashi Ruia among its clients, having supplied the two industrialists two Sikorsky helicopters each. InterGlobe also operates low cost airline IndiGo.
“A declining trend in the rupee value, and high import duties lead to a larger bill. All this is leading to a slower decision making.While we are slightly behind the target, our aim is to sell one aircraft every month,“ said Harwood. Against a target of 12 private aircraft, Harwood hopes to finish the financial year with a sale of 10, in an optimistic scenario. The price tag for private jets sold in India ranges from US$ 4 million to US$ 23 million.
But it’s not just the aircraft business that has been adversely impacted the company’s newly launched luxury car division could be still-born as the rupee still hovers between the 51 and 52 levels. The company, which introduced Sweden’s sports car brand Koenigsegg Agera in March, priced at Rs 12.5 crore, had set a target of two units annually.“The exchange rate fluctuation has added 25% to the cost of the car,“ said Harwood. The company claims to have 60% market share in the private luxury jets business in India and has sold 44 aircraft in its four years of operations in the subcontinent. It anticipates a temporary slowdown in 2012 and 2013 before recovery occurs. Key geographies where customers come from include the North-East, where the company sold five aircraft this year, and cities such as Hyderabad, Pune and Ahmedabad.
Earlier this year, InterGlobe Estd also started to retail yachts and speed-boats for its clients in India, a majority of orders originating from landlocked cities such as Delhi, Bangalore and Hyderabad.
“While 85% of our current sales are derived from the aircraft, we see the equation balancing 50:50 in four years from now. Our internal intelligence reports claim we have 15,769 potential customers in India with disposable income of more than US$1 million” says Harwood.
InterGlobe Estd is also setting up two showrooms, one each in Mumbai and Chennai, as one stop destination to retail super-luxury products including the aircraft, yachts and automotive
adapted from Hindustan Times
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