As North falters on diesel ban, South rescues Mercedes with sales surge

Mercedes Benz is betting big on the southern region, which has shown strong volume growth in the past few months, to achieve its desired sales numbers this year.

At a time when the German luxury brand is hit by falling sales in National Capital Region in northern part of India due to restrictions on new diesel vehicle registrations, the southern region, comprising five States, has come to its rescue with strong sales growth and thereby compensating for the decline in northern region.

“We have achieved some striking growth in the South, which reported a sales surge of 24 per cent in Q1 of this calendar year. In 2014, the southern region contributed about a fourth (25 per cent) of all-India sales and the share increased to 30 per cent in 2015. This year in Q1, the share of South has increased to 36 per cent in overall sales at a time when there was a dip in national sales in the North,” Boris Fitz, Vice-President – Sales and Network Development, Mercedes-Benz India Pvt Ltd, told BusinessLine here after announcing the launch of its luxury SUV GLC 220 d Edition 1, priced at ₹ 56.70 lakh (petrol) and ₹ 56.90 lakh (diesel).

“We have to wait and see whether the share of south is sustainable. But, at the moment south is number one in terms sales and it is a biggest contributor to our national sales growth. We expect very similar performance towards remaining half of the year and south to be a key pillar of our growth this year, he added.

The company cited a combination of factors that helped for sales surge in southern region. The primary factor has been its network expansion and brand activities associated with it. About a third of its total dealer outlets are in the South, and the company intends to add four-five more outlets in the region during 2016 as part of its all-India expansion.

Fitz also stated that its new generation of cars (NGCs) such as A Class, B Class and CLA with new design language and modern appeal attracted a good number of new buyers into the Mercedes brand fold in the region. “NGCs attracted different groups such as doctors, lawyers, IT professionals, small and medium entrepreneurs who in the past did not consider our brand. They are all now coming,” he added.

The company also said its lending schemes were made attractive. The total cost of ownership became competitive and resulted in affordable monthly outgo for the customers.

While it seeks to give big thrust on petrol models in view of growing demand for petrol models on the back of diesel ban, it is also reviewing its service packages for further improvements and make them more attractive for customers.

The company said that with its GLC SUV, it has a complete line-up for SUV portfolio to cash in on the growing preference for SUVs in the country. It has seven more new cars lined up for launches this year. GLC was its fifth launch in 2016.

“We now have the youngest and widest portfolio in the Indian luxury car market and we are hopeful of achieving our sales targets in 2016,” Fitz added.

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