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Ramping up its production capacity to pre-Covid levels is the biggest challenge facing Mercedes Benz, and it expects this ramp-up, as well as a demand revival, during the upcoming festival season, said a top company executive.
“The luxury car market has been more affected than the general automobile market, and of course, when a revival takes place, it takes place step by step. We have already seen some amount of revival already in the smaller segments. And we are hopeful that with the festive season coming, we will see more revival,” Piyush Arora, Executive Director-Operations, Mercedes Benz India, told BusinessLine.
Some green shoots in demand are already visible, he added.
On an average, the festival season accounts for around 19 per cent of the annual sales of passenger car makers.
Focus on digitisation
When it comes to the company’s supply chain management, a high degree of digitisation — particularly in terms of real-time information —has helped amid the challenges posed by the Covid-19 pandemic, Arora said. While digitisation efforts have been the focus area for Mercedes Benz, India’s largest luxury car maker, even before the pandemic, it got accelerated in the past few months due to the renewed focus on it due to Covid-19. The company plans to further bring in more digitisation, going forward, he said.
When asked about the future roadmap for the company in terms of its manufacturing and operations, Arora said: “Our state-of-the art manufacturing facility located in Chakan (Pune, Maharashtra) has been the backbone of our success story in India. The last 25 years have been a great success which we have achieved with the facility in Chakan. Staying ahead of the competition by bringing the newest and relevant technologies via manufacturing products in the local market — this has been our strategy in the past. Product diversification, relevant products and relevant technologies would still remain our main direction.”
There have been talks about the government’s plans to reduce the GST for two-wheelers. Arora said he is hopeful that this, along with the financial packages announced and other expected packages, will have a cascading effect on the automotive industry. A GST reduction in the luxury car market will also be welcome, he said.
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