Luxury car leader Mercedes-Benz is hopeful of beating its calendar year (CY) 2018 sales performance this year, Martin Schwenk, MD & CEO, told FE.
The company’s best annual sales came in CY18 when it had sold 15,538 units. Then the general slowdown happened, followed by the pandemic.
“In Q1CY22, we sold 4,022 cars, which was a 26% increase over Q1CY21 sales. In the remaining three quarters of the calendar year, we hope to do even better,” said Schwenk, adding, “Provided there aren’t any major challenges, such as the fourth wave of Covid-19, and the semiconductor shortage eases a bit.”
The carmaker is sitting on an order bank of more than 5,000 cars. “As of now, both the chips and ships are down. In addition to that, there is a container shortage and that is negatively impacting the global supply lines,” he said.
Mercedes-Benz locally assembles most of its cars at its Chakan, Pune plant and even if one part doesn’t arrive on time due to container shortage — it disrupts production lines.
“We have sold every car available with us, and the waiting period ranges from two months for some models to two years for speciality cars such as the G-Class,” Schwenk said.
On Tuesday, Mercedes-Benz launched the all-new C-Class in India, priced ex-showroom `55 lakh (C 200 petrol), `56 lakh (C 220d diesel), and `61 lakh (C 300d diesel). It also started a finance plan for the C-Class starting from `60,000 EMI. “Even before the price announcement, we have gotten more than 1,000 confirmed bookings for the C-Class, but the waiting period extends to 2-3 months,” Schwenk said.
Over the years, the carmaker is getting a new class of customers, i.e; people benefiting from the start-up boom, and who want to splurge on luxury goods.
The average age of a Mercedes-Benz India customer is far lower than in more mature markets. For example, the average age of the S-Class buyer in India is just 38 years — the S-Class is an expensive car, starting at `1.6 crore, ex-showroom — and the average age of the C-Class buyer is 35 years.
“There is a decent size young crowd in India that has the buying power and interest in luxury cars. Because India has a younger customer base, we need to bring in a lot of technology on the dashboard for them, and that technology later percolates down to more affordable cars and indirectly to the mass market segment,” Schwenk said.
Mercedes-Benz India has observed that the percentage of people buying cars priced above `1 crore has been increasing. In CY18, 40% of the buyers bought a Mercedes-Benz car priced under `50 lakh, 48% bought a car priced `50 lakh to `1 crore, and only 12% bought a car priced from `1 crore upwards.
This has now changed to 24% (buying a car under `50 lakh), 47% (`50 lakh to `1 crore), and 29% (`1 crore and above). “This shows that the luxury car market in India is maturing,” he said.
Soon, the carmaker will start local production of the EQS electric car—its top-of-the-line electric car that has a range of about 700 km. “Local manufacturing of the EQS is a step in the right direction for us towards mainstreaming luxury Evs,” said Schwenk.
In CY20, it launched the EQC electric car, as a CBU import.