German luxury carmaker Mercedes-Benz is going full throttle on launching top-end luxury vehicles in the Indian automobile market. Santosh Iyer, the MD and CEO of Mercedes-Benz India spoke to businessline on the sidelines of the launch of AMG SL 55 4MATIC+ roadster
How is the market pickup for super-premium vehicles in India?
We have 70-80 per cent shares from the super-premium vehicle segment. In the first five months of this year, we did more than 1,700 cars in the segment. Twenty five per cent of our total sales are only top-end vehicles and it is growing. It shows that consumers are mature when consuming luxury. Consumers are preferring top-end luxury, customisable, desirable cars like Maybach.
The Top-end vehicle segment saw good growth for the company in Q1. What is the anticipation from Q2?
We are expecting Double-digit growth during this quarter.
What is the takeaway in electric vehicles as compared to combustion engine for Mercedes-Benz India?
Electric vehicles (EV) are two to four per cent of our sales but for us the EV segment is also very different. We localised electric vehicle that is at the top end of the segment — EQS. We do not offer any product in ₹40 to ₹70 lakh segment. We are focused on top end vehicles even in electric vehicles and not participating in the larger segment in the luxury car market.
The response to our electric vehicle is positive with a waiting period of three to four months.
Original equipment manufacturer (OEM) are following Mercedes-Benz India footsteps and introducing the Direct to Consumer (D2C). How is the growth for the company from D2C?
The D2C approach is a successful model for us and we were able to change the consumer experience and focus purely on luxury. This is proven from the fact that the same model is live now in Germany, UK and Turkey.
Mercedes-Benz India introduced telediagnosis for its cars. How will the use of AI change the landscape of luxury cars?
We are at the tipping point of complete digitisation, AI and using data to increase customer experiences. We have access to the car remotely and customers get an alert when service is due or if any problems arises. We are able to provide instant assistance to customers. They also have an option to disable it if they want.
In the US, we have introduced beta version of ChatGPT in our cars. We also have our own voice assistance ‘hey Mercedes’ that uses AI to understand consumer preferences and provides options. Mercedes-Benz is at the forefront of technology and innovation. We are the only brand in the world that offers level three autonomous cars in the US market.
When can we expect ChatGPT in the cars offered in India?
We will have to give it time. If it is successful in USA then there could be a global roll out. It is too early and even in the US it is beta version.
Mercedes-Benz has ramped up production. Is the waiting period on cars reduced?
Production is in second shift already but we still have an order bank of 3500 cars. Our quarter two results will reflect higher retail as we are continuously working on it. The top end vehicle segment continues to have a longer waiting period.
Are the headwinds still impacting the business?
We took two price increases this year one in January and the other in April. If the exchange rate detoriates any further we will have to take another price increase. This could impact the demand. The other aspect is the interest rate but thankfully that is stable. If anything does further North there could be impact in consumption.
How has the luxury boutique concept worked out for Mercedes-Benz India?
We are transforming our outlets into boutiques and both our partners and customers have appreciated it and liked the ambience. It is more car sales per outlet that we are able to see with a better customer experience. We have the boutiques in Cochin, Delhi and Ahmedabad and will be introducing new boutique in Delhi and Mumbai.