India's luxury car sales accelerating

German giant Mercedes-Benz admits it was "a little surprised" when Indian customers snapped up 125 of its new top-of-the-line S-Class luxury cars costing 15.7 million rupees (HK$1.96 million) each in just 16 days.

India's car industry has skidded on to an icy patch and is set for a second consecutive year of decline, but one segment still accelerating is luxury cars.

Analysts at India's premier car fair in the New Delhi suburb of Greater Noida last week said for the "really rich", economic downturns had a "negligible impact" on their luxury spending.

The wealthy were much less sensitive to high interest rates and were more resilient overall to downturns, they said.

"Luxury cars sales are still growing at 15 per cent plus year on year. For the next three years, segment growth is expected to continue at 15 per cent upwards," noted a report by the Confederation of Indian Industry and market research firm IMRB International.

Sales have gone into overdrive for parts of the luxury car segment. Daimler's Mercedes-Benz, for instance, saw sales rocket 32 per cent year on year in India last year, despite punitive import tariffs.

Still, "while we believe strongly in our product, we were a little surprised when we sold 125 S-Class cars in 16 days - and this was to customers who bought them sight unseen", Mercedes-Benz India chief executive Eberhard Kern said.