Comments
Luxury carmaker Mercedes-Benz’s growth in India has hit a speed-breaker, with the German firm reporting a dip in both revenues and profits after a gap of six years.
Mercedes-Benz reported revenues of ₹6,078 crore for the fiscal 2018 compared with a ₹6,183-crore revenue in fiscal 2017, a 1.7 per cent drop, as per data from Registrar of Companies.
However, profits saw even a steeper decline of 19 per cent, at ₹305 crore compared with ₹376 crore it earned a year earlier, according to financial data accessed by business intelligence platform, Tofler.
Despite the lead and overall increase in volumes, albeit marginal, Mercedes’ financial performance is an indicator of the challenges faced by German automaker.
For calendar year 2018, Mercedes-Benz India sold 15,538 units, its highest-ever annual sales in India, when compared with 15,330 units in 2017, an increase of 1.4 per cent.
“We are satisfied with our sales performance in 2018, despite facing strong macro-economic headwinds in H2, resulting in low consumer sentiment that posed significant sales challenges. We, however, made a strong comeback in the Q4 period and were able to achieve a year-on-year growth,” said Martin Schwenk, Managing Director & CEO, Mercedes-Benz India, who took charge in July 2018.
The year 2019 will mark 25 years of operations of the Three Pointed Star in India.
Increasing competition
Experts believe the huge drop in profits suffered by Mercedes is caused by heavy sales push from the company to thwart increasing competition from some of the smaller players like Volvo and Jaguar Land Rover. An increase in cess on luxury cars that came into effect after the implementation of the Goods and Services Tax was a major spoiler for Mercedes, as this was coupled with a five per cent hike in customs duty on completely knocked down kits to 15 per cent.
Other luxury car makers have increased their launches in India in the lastyear, which reflects in their improved numbers. Jaguar Land Rover (JLR)-India registered an increase of 16 per cent in its annual sales at 4,596 units for 2018 when compared with 3,954 units in 2017. Arch-rival BMW, on the other hand, reported 13 per cent increase in its annual sales at 11,105 units.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.