Customers conscious about fuel prices even for luxury brands: Mercedes-Benz CEO

Indian customers are always conscious about fuel prices even for luxury brands, and they are sensitive on operational cost too, which are being calculated while buying a new car, a top official at Mercedes-Benz India said.

There have been instances of 14 price hikes of fuel in 16 days (between March 22 and April 6) and till mid-April, retail prices of petrol and diesel have gone up by 6-8 per cent.

Convincing customers

“We have always seen that Indian customers are conscious about fuel prices, specifically even on higher-end cars or the larger SUVs, where we would think the prices of the vehicles anyway were more than ₹1 crore, so would it matter to them? But, it does matter to them,” Martin Schwenk, Managing Director and Chief Executive Officer, Mercedes-Benz India, told BusinessLine.

Schwenk says he’s confident that the new C Class will convince customers of the fuel efficiency aspect | Photo Credit: S Ronendra Singh

He said that is why Mercedes-Benz has launched the new C-Class with best mileage in the segment — 16.9 km/l for the new C 200 (petrol), 23 km/l for the C 220d (diesel) and 20.37 km/l for the C 300d (diesel). The C 200 is priced at ₹55 lakh, C 220d at ₹56 lakh, and C 300d at ₹61 lakh (all India ex-showroom prices).

“We are confident that with our new C Class, it will convince a lot of customers from that aspect (fuel efficiency) ... they are saving a lot compared with previous models and also with what is available in the market,” Schwenk said adding that the average age of buyers have also come down to 35-40 years now, from 40-45 years earlier.

Martin Schwenk, MD and CEO, Mercedes-Benz India | Photo Credit: Sachin Bhivare

Best year

He said with such products and with already demand for existing models, this year will be the best for Mercedes-Benz India. There is already an orderbook of 5,000 cars as of April. “It is still very early, but we are confident because we believe demand is there, so it was our job to mitigate supply chain issues with the best possible way and if we are able to do that, we will be selling more than 15,500 which we sold in 2018,” he explained.

The waiting period ranges from two to eight months, depending on the models. Mercedes has 48 per cent of sedans in its portfolio, in which the E-Class is the strongest, followed by the C-Class and 48 per cent of the C-Class are first-time luxury car buyers, he added.

Journey forward

Going forward, Schwenk said the company will not have hybrid models, though most of the cars will have ‘integrated starter generator’ (mild hybrid) like in the new C-Class and there will be more electric vehicles (EVs). “We have a clear journey for a couple of years — on one hand, we are completing our portfolio in traditional internal combustion engine (ICE) and on the other, started the electric cars with EQC last year. Later this year, we will start with local production of EQS,” he said.

The EV journey has started and Mercedes-Benz India has charted plans for the next five years where more models will be added, either imported or domestically produced or assembled, Schwenk added.

COMMENT NOW