While Mercedes-Benz India posted 43% decline in sales (at 7,893 units) in CY20—impacted by the Covid-19 pandemic—it was able to maintain its leadership position in the luxury car segment. Towards the end of last year (Q4CY20) the German carmaker saw sales growing 40% over Q3. Going forward, Santosh Iyer, Vice-President, Sales & Marketing, Mercedes-Benz India, says the immediate focus is to service the demand that is coming back strongly, he says in an interview with FE’s Vikram Chaudhary.
How is CY21 expected to be for Mercedes-Benz India?
This year we will have more ‘volume products’, including the new A-Class Limousine (which replaces the CLA) as well as the new GLA, in addition to made-in-India AMG cars. We have seen good inquiry flow, and the demand has come back strongly; we have been trying to meet that demand, so the immediate focus is to ensure we are able to cater to this demand. We are right now at the lowest stock levels at the dealer-end.
But what gives you the confidence that the demand will continue?
We increased car prices in January, but haven’t yet seen the demand tapering off. There are challenges such as the global semiconductor issue, but the issue is more on the supply side and less on the demand side.
What is the rationale behind making AMG cars in India?
In the performance car category there are two segments: One is the purists—those who experience our performance cars on the track (they have their own events, own clubs, and they own cars such as the AMG GT 63). But there are also prospective customers who love performance motoring but may not be able to own a car such as the AMG GT 63 (because of its high price). Making entry-level AMG cars in India reduces their sticker price substantially. For example, if we import the AMG A 35 sedan, it may cost Rs 80-85 lakh, but by localising it we can that car in the range of Rs 60 lakh. This brings in a new set of customers to our fold who see value in the product, and maybe later can graduate to more expensive AMG cars. In fact, we will launch seven new AMG cars in India this year, and many of these will be localised.
Did you see a new set of customers post the lockdown?
We have come across two new sets of customers. One is those who are completely unlocking themselves; they were indoors for many months and now they are enjoying life. With uncertainties around, they are splurging and buying cars. A portion of those is also customers who, let’s say, used to invest in SIPs, but now they feel it’s better to consume rather than save.
Two, new car sales in the luxury segment are coming from those who have shifted from air traffic to road traffic. On certain routes such as Delhi-Jaipur or Bengaluru-Chennai, earlier a lot of people used to take flights, but now that entire traffic has moved to road. There are people doing those routes who want safer and more luxurious cars, and this is also driving luxury car sales to an extent.
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