Monthly inflows in Systematic Investment Plan (SIP) mutual funds surged to Rs 12,000 crore between May and August this year. Similarly, luxury car sales in India went up by 55 per cent in the first half of 2022, as compared to the same period a year before. It doesn’t seem like the two are inversely proportional, but carmaker Mercedes-Benz’s sales and marketing head in India, Santosh Iyer feels the two are somehow related.
Investment vehicles zoom ahead of luxury cars?
He feels that the reason that Indians aren’t buying more luxury cars, because they are investing their disposable wealth in SIPs. It’s not like the Indian luxury car market isn’t thriving, but the Mercedes sales head feels Indians aren’t splurging on high-end vehicles as they could. It is a fact that SIPs are the most preferred way of investing in mutual funds for Indians, with almost six crore accounts for it, but a car isn’t really an investment vehicle.
A far-fetched comparison?
As he made fudged the two different sectors into one theory, Iyer added that disposable income going towards buying a Mercedes or BMW or Lamborghini, isn’t as high as it should be. He also added that the number of inquiries are a lot higher than the number of cars being sold. Iyer then claimed that this was happening since buyers either wait for the prices to dip, or simply invest their cash in SIPs.
Basing strategies on the theory?
After coming up with the theory, the sales and marketing head even instructed his team to analyse investments in SIPs to come up with a way to make people buy more cars. He even told The Times of India, that SIPs are a competitor for Mercedes, and not other brands such as Lamborghini or Porsche. If this is a serious business strategy and not a marketing ploy by Iyer, Mercedes ads may soon have its cars racing against SIPs instead of other vehicles.