Luxury car maker Mercedes-Benz is seeing strong demand in India, which is proving to be better than what was expected a few months ago, despite issues like supply constraints and an increase in commodity prices, said Martin Schwenk, Managing Director and CEO, Mercedes-Benz India.

“On the demand side, we are very confident at the moment. We see very strong traction on all of our SUVs. We even have some cars really sold out at the moment, which we will have to resolve soon. Overall, I think we have a very positive momentum… Both the quarters — the current one and the last quarter of 2020 — have actually proven to be stronger than what we had hoped for say 6-8 months ago,” Schwenk told BusinessLine in an interview.

Key challenges

Constraints on the supply side because of container shortages as well as the weakening of the rupee and the rise in commodity prices are challenges that exist, he said.

Mercedes-Benz had introduced the first luxury electric car in India, the EQC, last year. “I'm positively surprised about the reception of the EQC. We have had a lot of queries and also, the first batch of cars was sold out relatively quickly. Unfortunately, we had a little bit of supply constraints there as well — it's a fully imported vehicle, and we didn’t have enough supply. So we are getting our new batches now. And I'm positive that it will further find its market,” said Schwenk.

Electric models

By 2022, Mercedes-Benz has a global plan to bring in more than 10 electric models. “We will look into what makes best sense for India out of it. And we will see, based on our learnings of the EQC, what we will then do in terms of moving forward on the electric path. I think we will definitely make further moves there,” said Schwenk.

Tesla has plans to enter the Indian market soon, and is expected to play in the luxury market. When asked about this, Schwenk said: “Every new entry will help to expand the market for electric vehicles. Whether it's Tata or Tesla, the more efforts they put in expanding the market, at the end, it will be helpful for growing awareness on electric vehicles. And that will then eventually also influence the size of the market..Any new entry might also influence the adoption of electric vehicles in India. It can also cause a little ripple effect as to how we would act in the market.”

On whether there is a concern that Tesla can take away some of Mercedes’ potential customers, Schwenk said: “I would think, in the electric market, it will be very helpful to have more premium car players appearing to expand the market, and then the better car may win. So, I'm confident we have a very good product out. So, we will see how it turns out.”

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