India's Luxury Car Market Shifts Towards Multi-Purpose Vehicles

India’s luxury car market has a new growth engine — and it isn’t an SUV. Multi-Purpose Vehicles (MPVs) priced above ₹60 lakh are emerging as one of the fastest-growing niches in the premium segment, signalling a shift in how affluent buyers are redefining status, comfort and practicality. Still modest at roughly 1,050 units annually, the segment is expanding steadily, attracting fresh entrants and formalising what was once viewed as a fringe experiment. What began in 2019 as a tentative bet has evolved into a credible luxury mobility category. The broader premiumisation wave provides the backdrop. According to JATO Dynamics, industry sales of vehicles priced above ₹60 lakh have surged from 10,120 units in 2020 to 39,859 units in 2025. Market share has risen from 0.41% to 0.87% over the same period — nearly doubling as the top end outpaces the mass market. Within that, luxury MPVs are scaling up even faster. Volumes have climbed from 493 units in 2020 to 2,485 units in 2025. Their share within the ₹60 lakh-plus band has more than doubled from 0.17% to 0.41%, highlighting accelerated premiumisation from a small base. The segment’s origins trace back to 2019 when Mercedes-Benz introduced the V-Class at ₹68 lakh, testing the viability of high-end luxury vans in India. Though discontinued in 2022, it demonstrated latent demand. Toyota followed with the Vellfire, steadily cultivating a clientele among business families, political leaders and film personalities, effectively anchoring the category. Today, prices range from about ₹60 lakh to over ₹2 crore. At the entry level, Kia’s Carnival and MG Motor’s all-electric M9 offer plush cabins and advanced features. The Toyota Vellfire — now the benchmark — is priced around ₹1.2–1.25 crore. At the top end, Lexus’s LM commands roughly ₹2.15 crore, pushing the ceiling significantly higher. Mercedes-Benz is preparing to re-enter next month with the latest-generation V-Class, expected to be priced from around ₹1.5 crore and positioned within its Top-End Vehicle portfolio, which grew 34% in 2025 — reflecting rising appetite for high-margin luxury products. Unlike traditional large SUVs that emphasise muscular styling and road presence, luxury MPVs are engineered around space optimisation and interior flexibility. Lounge-style layouts, sliding doors and configurable seating define the category. In 2025, the Toyota Vellfire averaged about 100 units per month — notable for what was once considered an ultra-niche space. Prices have nearly doubled since its early years, signalling stronger brand positioning and wider acceptance. The shift is not merely numerical but behavioural. A growing section of affluent buyers prefer vehicles that combine comfort, discretion and practicality. Compared with full-size SUVs, MPVs offer comparable cabin space with easier access and superior third-row usability. In dense urban environments, they can be more manageable than long-wheelbase sedans while delivering greater interior versatility. Ravi Bhatia of JATO Dynamics notes that while the ₹60 lakh-plus band has expanded steadily, luxury MPVs are premiumising faster from a smaller base. Toyota has largely built and sustained the segment so far, but the return of Mercedes-Benz signals rising OEM confidence and helps formalise the category beyond a single-model success story. Automakers see further headroom. As India’s millionaire base widens and luxury penetration deepens beyond metros, premium MPVs are evolving into a distinct, understated status symbol. The next phase could see more global entrants, increased electrification and gradual volume expansion over the next three to five years.