In nouveau riche India, even the poor show off

"What the Indian consumer wants is the latest technology, and in the premium car segment they're looking for a fully loaded car," says Linus Schmeckel. "They don't like to be seen as second-class consumers."

Even this reporter's housekeeper, Asha Maya Tamangi is occasionally given to extravagance. She can nearly touch every wall of her apartment from her bed, and when she visits her parents in Nepal each summer, the trip involves a four-hour flight, a 14-hour bus ride, and two days of trekking through the Himalayas.

But when she needed to buy a mobile phone recently, simplicity just wouldn't do. She wanted to use it to listen to the radio, to take pictures of friends, and especially to make videos of her parents that she could bring back to New Delhi.

So she spent $170 – almost the equivalent of two month's wages – to get a phone far better than even her employer's.

At the highest end of the market, the trend is still small. Mercedes's Kathuria estimates that he sells 150 fully loaded imports a year; BMW's new India plant will make about 1,700 units annually for the domestic market. But the trend is upward.

"Spending power is going up by the day," says Kathuria, estimating that sales are growing by 10 to 12 percent a year. "Consumers are becoming very demanding – they want the best."

The same is true across all economic levels. Praman Kapur cannot yet afford a fully loaded Mercedes, but he has spent more than $2,000 in his quest to get his modest Skoda sedan to do zero to 60 m.p.h. in six seconds. He even had a used Mercedes for a while, which included a button that would lower the car five inches to make it more aerodynamic. "I had never seen this stuff in India," he exclaims.

Now, he hears that BMW will soon introduce a mid-class roadster that he could customize according to his exact specifications. "I've been closely looking at that," says Mr. Kapur, who works in real-estate and construction.

"If they're buying something at Rs. 60,000 ($1,500), they might stretch it to Rs. 80,000 ($2,000)," he says.

Even Indians on working-class wages are not excluded, and mobile phones are a favorite status symbol. Mr. Mangalorkar of A.T. Kearney recalls the time a bellboy cam up to him in a hotel lobby and asked him about his sleek BlackBerry phone. "He would not be able to use half the features on that phone," Mangalorkar says. "But they want all the bells and whistles."

It is hardly an unusual situation. Anil Choudhary is the manager of an electronics store, but he jokes: "My housekeeper is using a better mobile phone than me."

For her part, Tamangi is happy with her purchase. She even lent her phone to a friend, who used it to take pictures of her two daughters, who are enrolled in a boarding school a two-day journey away. But she is nervous: "If it is lost, it will be very sad, because it is very expensive."

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