“If you compare India and China, for every car sold in India, China sells 7 and in luxury cars for every car sold in India, China sells 53! There are a lot of opportunities in India but in last 4-5 years we’ve not seen growth getting closer to China and India is still significantly behind. That’s also the way Germany looks at it and we hope India can make it into the top 20 markets for Mercedes Benz but the question is when and what are the other disruptive elements that the government will come up with. Every time we get some growth, we are taxed higher which dampens sentiment,” said Mercedes-Benz India MD & CEO Roland Folger.
Mercedes Benz is focusing on getting incremental growth from Tier 2-3 cities which currently comprise 30-40% of its sales. “Our growth depends on moving into tier 2-3 cities but it works both ways — you need volume growth in order for our dealers to invest in expanding infrastructure,” said Folger. “We’ve been experimenting with smaller satellite formats meaning the dealership size is more compact with more emphasis on after service with may be 2-3 cars for display. Growth in 2-3 cities has doubled in last 3 years as we’ve doubled our outlets as well though it’s on the back of a lower base,” he added. Mercedes Benz sells more SUVs than sedans in tier 2-3 cities because “these customers are more conservative and local road conditions make SUVs preferable” he added. The company’s top seller in Tier 1 cities and metros is the E Class.
In an effort to retain its leadership and make the business viable for its dealers, Mercedes Benz has chalked out an aggressive plan for this year. “We want to reach 100 plus dealer outlets in 2018 and launch 10 new products to sustain our growth,” said Folger. The company launched the new S Class on Monday with BS6 compliant engine. The Mercedes-Benz S 350 d is priced at Rs 1.33 crore, while the petrol version S 450 is priced at Rs 1.37 crore.
As for electric mobility, the company is globally investing 11 billion euro on 10 electric vehicles which will roll out starting 2019. “We are planning 15-25% of our overall output – including India – to come from electric vehicles by 2025,” said Folger. The growth of electric mobility will depend upon growth of infrastructure so “I am opposed to 100% target in 2030 because it is unrealistic. We believe there must be other solutions as well and we are imploring the government to keep these solutions as well,” he added.