In Q3CY21, sales of Mercedes-Benz cars almost touched pre-pandemic levels. But the German carmaker may not be able to reach CY19 sales in CY21, because of the Covid-19 second wave earlier this year negatively impacting sales, and the current supply disruption (due to the semiconductor shortage). “However, I must add that the demand has definitely reached pre-pandemic levels,” says Martin Schwenk, MD & CEO, Mercedes-Benz India, in an interview with FE’s Vikram Chaudhary.
Which year was your peak as far as new-car sales are concerned?
It was CY18, when we sold 15,538 units in India. Sales slightly dropped in CY19 (13,786 units), and then the pandemic struck (7,893 units in CY20).
Can you match the CY19 levels in sales in CY21?
The run rate, at least in Q3CY21, is on pre-pandemic levels, but of course we haven’t gotten full year of sales in CY21 (because of the Covid-19 second wave that negatively impacted sales). Also, in the ongoing Q4CY21, we have been facing some supply constraints. However, I must add that the demand has definitely reached pre-pandemic levels, and so the challenge is how to fulfil that demand.
What is your take on high import duties on CBU electric vehicles? Should these be reduced for, let’s say, a period of 3-4 years to make EVs more popular?
Any decision taken for the auto industry must have a long-term vision. It makes sense to set a policy that defines a clear path for automakers. Instead of having immediate reduction on, let’s say, import duties on EVs, there can be a graded approach to reduce duties over time to a substantially lower level, which would then open the market and benefit consumers. As of now, I hope that the regulations around reduced GST for EVs remain in place.
As far as import duties in general are concerned, we can follow the WTO’s levels (something between 10% and 20%), and create plans for gradually reaching those levels.
What has been the response to the EQC electric car?
It has been bought mostly by existing luxury car owners who want to have a more sustainable vehicle in their garage; also, those who want both electric and luxury. In the beginning we sold the EQC in only six cities, but now we have opened the whole network for this car.
What is your diesel portfolio like?
Currently, 70% of our sales are coming from diesel models, because a large percentage of customers wants diesel engines. I must add that our diesel engines are very clean, and because they are much more fuel efficient than petrol engines, their carbon dioxide emissions are also comparatively lower. Outside of metro cities there is a huge demand for diesel cars, and especially SUVs.
How have customers/partners reacted to your Retail of the Future (ROTF) model?
Under the ROTF, Mercedes-Benz sells cars directly to customers. With the ROTF, we have created a completely unified customer journey experience with many industry-first initiatives. For the first time in India, there are no incidental or extra charges for customers, and they have direct access to Mercedes-Benz India’s national stock with a wide variety of inventory choices. The ROTF is a step to get closer to our customers, and a result of listening to their requirements and acting on these.
Why did you start local production of AMG cars, which sell in few hundred units in India?
This step reiterates our strong commitment to the Indian market. Local production of AMG cars will further increase the popularity of the performance brand in India and cater to the increasing demand for performance motoring enthusiasts. It also gives us a competitive edge in the dynamic Indian luxury car market.
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