Landmark Cars: Capitalizing on India's Growing Demand for Luxury Vehicles

Brokerage Free Team • May 15, 2024 | 3 min read • 523 views



In today's blog we delve into the success story of Landmark Cars, a major player riding the wave of increasing demand for luxury and premium vehicles in India.

Mercedes-Benz's Record Sales in India

Mercedes-Benz achieved a milestone in 2023, selling 17,408 cars in India, the highest sales recorded for the German automaker in the country. This significant achievement has Mercedes-Benz optimistic about India's potential, aiming to launch 12 new models and expand its dealership network in 2024. With this burgeoning demand, India could become one of Mercedes-Benz's top three markets under the Region Overseas classification.


The Key Player: Landmark Cars

Landmark Cars, the largest dealer for Mercedes-Benz in India, plays a pivotal role in this growth story. Since 2008, Landmark has been instrumental in selling Mercedes cars, holding a 16% market share with 21 outlets across various regions in India. The relationship between Mercedes-Benz and Landmark Cars is crucial as dealers are essential for customer interaction, insurance facilitation, registration, and feedback.


Revenue Streams of Landmark Cars

Landmark Cars generates revenue through five primary channels:


Selling New Vehicles

The bulk of Landmark Cars' revenue comes from selling new cars. Traditionally, dealers purchase vehicles from carmakers and sell them at a markup, earning a commission of 3–5%, which can go up to 6–8% for luxury vehicles. However, since 2021, Mercedes-Benz adopted an agency model, allowing Landmark to earn commissions without bearing inventory risks. This segment accounts for 77% of Landmark’s revenue.


After-Sales Services

Regular vehicle maintenance and repair services form a recurring revenue stream, contributing 20% to the top line. This segment has seen consistent growth of 20% annually from FY14 to FY23.


Accessories Sales

Selling car accessories like floor mats, seat covers, and paint protection films is a high-margin business, although it represents a minor portion of total revenue.


Financing and Insurance

Landmark Cars partners with financial institutions to offer financing solutions and insurance to buyers, earning commissions on these services. This stream adds about 1% to the revenue.


Pre-Owned Vehicles

The sale of certified pre-owned vehicles is a growing segment, currently contributing 2% to the overall revenue. The younger demographic's interest in luxury cars at lower prices is driving this growth.


Diversification Beyond Mercedes-Benz

While Mercedes-Benz remains a significant partner, contributing less than 30% to Landmark's revenues, the company also deals with other brands. These include Jeep for premium vehicles, Honda and Volkswagen for mid-range cars, and BYD and MG Motors in the EV segment. Recently, Landmark also acquired dealerships for Mahindra & Mahindra.


Growth Potential and Competitive Landscape

Landmark Cars stands at a promising juncture, with potential for significant growth driven by India's rising demand for premium and luxury vehicles. Compared to global giants like Penske Automotive, AutoNation, and Zhongsheng Group Holding, Landmark has ample room for expansion with its current 120 outlets across nine states.


Challenges and Market Penetration

Despite the promising outlook, there are risks. Economic downturns can impact luxury vehicle sales, as seen during the COVID-19 pandemic. Additionally, luxury cars constitute just 1% of new car sales in India, compared to 5–8% in other emerging economies and 13% in China. This low penetration suggests a potential market opportunity, yet it has remained stagnant. Behavioral factors, such as conservative spending habits among Indian millionaires, contribute to this phenomenon. According to ICICI Securities, only 4% of Indian millionaires purchase luxury cars, compared to the global average of 60%.



Landmark Cars is well-positioned to capitalize on India's growing aspiration for luxury vehicles. However, the company must navigate economic uncertainties and cultural spending habits to fully realize its potential in this evolving market.