Large Cars & Luxury Cars industry gained strategic significance in many countries in the early 2000s. Though this industry has gained importance but the profit margins have declined over the years.

Statistics speak that with increasing maturity in large cars & luxury cars industry, profits declined from 20 percent in 1920s to 10 percent in the 1960s, which again declined further 5 percent in 2004. This industry accounts only 1.6 percent of Europe's stock market capitalization and 0.6 percent of USA stock market capitalization. Large Cars & Luxury Cars industry has stagnated in recent years. The automobile market of America, Europe and Japan, where over 80 percent of large cars & luxury cars are sold has come to a stagnation state.

In countries like Germany and France, which are famous for automobile industries due to rigid labor laws has shut down several automobile factories. In America, with the advent of European, Japanese and South Korean car makers, there has been an over production of cars. The car makers have taken special steps in improving the productivity and thus the large cars & luxury cars industry have undergone a structural transformation in the early years of 2000s.

It is believed that car industry was initiated in Germany more than 100 years ago. Development in this industry started in France in the 1900s. This industry came up with age in America due to assembly line production system, which was introduced by Henry Ford. There were several innovative processes that were introduced in car industry like the concept of "planned obsolescence,”.

The recent luxury car tax hike has led to a sharp drop in luxury car sales. There has been a drastic drop in the sales of luxury cars, which has led to setback in Government’s expected windfall gain. Statistical figure say that sales of luxury cars has dropped by approximately 25 per cent. The effect of the subprime crisis began to be felt from early 2007. This crisis initially did not effect domestic sales of super luxury cars which were priced between Rs 1 and 3 crore.