Another issue for the retail sector is that this 10 - 12 million consumer of high income group is not located in the small pocket of India but all over India which is as large as Europe so distribution is another issue because country infrastructure is almost bleeding.

Another point which a luxury consumer goods company like Mercedes or Audi may not like is that the people who have the money but don’t declare it would not be able to purchase their expensive luxury cars as for purchasing any luxury car you need to show money in white i.e. on papers, which many in India don’t, so they cannot purchase even though have the money.

Overestimated Indian market potential…

Experts who make big news about high purchasing power of Indian high income group only tell about growth rate in India which seems impressive but in actual terms that comes out to be almost nothing.

Let’s look at the sales of the German luxury car group BMW in the first quarter of 2008.

According to a news article, “The biggest increase for BMW was in India, where there was a leap of 800 per cent… Sales fell however by 9.2 percent in the United States,”³⁹ now this looks impressive isn’t, 800% jump in India and gives a rosy picture about Indian growing market.

Now let’s look at the total number of cars sold in India, well it is only 862 BMW cars sold in whole of India in first quarter of 2008? Do you think it is a very big market??? ....