Arvind Balan on How Gen Z Is Redefining the Luxury Car Market

There’s a lot of conversation around Gen Z and their relationship with luxury cars. Are they really ready to go premium, or is it all about the features for them?

That’s a fascinating question and one I’ve been analyzing closely. Gen Z is redefining what luxury means, especially in a market like India. Traditionally, luxury was all about exclusivity and status. For Gen Z, though, it’s about innovation, sustainability, and how a product fits into their lifestyle.

So, they’re not just chasing brand prestige anymore?

Exactly. Take the recent trends in the Indian luxury car market. It’s projected to grow at a CAGR of 6.4% over the next five years. A big chunk of this growth is coming from younger buyers Gen Z and Millennials. These are digital natives who prioritize technology integration and eco-consciousness over flashy branding.

That’s interesting. Can you give us some real-world examples of how this plays out?

Sure. Let’s look at electric vehicles (EVs). Mercedes-Benz, for instance, reported that many of their younger Indian customers are opting for EVs as their first luxury car. That’s a huge shift. And it’s not just Mercedes; brands like MG Motor are also tapping into this trend by creating tech-driven showrooms and promoting EVs as aspirational yet practical.

Do you think this trend is driven by global influence, or is it unique to India?

It’s a mix of both. Globally, studies like the Experian report show Gen Z prefers compact, fuel-efficient cars. In India, however, it’s not just about fuel efficiency. It’s about sustainability and the overall experience. For example, a Deloitte study revealed that nearly 47% of Gen Z consumers prioritize advanced safety and tech features in their cars. That aligns perfectly with what we’re seeing on the ground here.

Speaking of features, how do luxury brands balance the demand for affordability with premium offerings?

That’s a delicate balance. Gen Z is cost-conscious but still willing to invest in value. That’s why models like the BMW 2 Series and Mercedes-Benz A-Class Limousine are gaining popularity because they offer premium experiences without being overly expensive. It’s about making luxury accessible while maintaining exclusivity.

What role does sustainability play in all this?

Sustainability is non-negotiable for this generation. A Capgemini report found that 65% of Gen Z buyers globally consider sustainability a key factor in their purchase decisions. This is especially true in India, where environmental consciousness is growing rapidly. Luxury brands investing in EVs and hybrids are positioning themselves as future-ready, which resonates deeply with Gen Z.

Beyond the cars themselves, how important is marketing in capturing this audience?

It’s critical. Gen Z doesn’t just buy products, they buy experiences. That’s where experiential marketing comes in. We’ve worked with brands to create immersive test drives, influencer collaborations, and even virtual reality showcases. It’s about engaging them where they spend their time, online and on social media.

So, would you say the future of luxury cars is in good hands with Gen Z?

Absolutely. This generation isn’t just ready for luxury, they’re redefining it. It’s not about following old norms; it’s about innovation, sustainability, and a seamless blend of premium and practical. The brands that understand this will not only win Gen Z but set the tone for the entire industry