Companies

Looking at closing calendar year with more than one product launch: Mercedes Benz India MD & CEO

Nandana James Mumbai | Updated on October 16, 2019 Published on October 16, 2019

Mercedes-Benz India MD & CEO Martin Schwenk at the launch of the G350d off-road luxury vehicle in Mumbai, on Wednesday   -  PAUL NORONHA

The company remains bullish about the long-term potential of the Indian market, says Martin Schwenk

Mercedes-Benz India, the country’s largest luxury carmaker, is moving away from its earlier decision to defer product launches for a while, triggered by the pronounced slowdown beleaguering the auto sector. It is now looking at closing this calendar year with more than one product launch, said Martin Schwenk, the company’s MD and CEO.

Schwenk told BusinessLine that when the auto industry initially started reeling under the impact of the slowdown, Mercedes-Benz resorted to managing its inventory levels, apart from deferring product launches for a while. But now that the situation seems to have been mitigated a bit, the firm is planning to not defer product launches, he said without giving further details.

The company on Wednesday launched the G350d, an off-road luxury vehicle (ex-showroom price of ₹1.5 crore), the first non-AMG and diesel version of its G-class SUV to be launched in the country, which it referred to as the commencement of its ‘product offensive’.

This is in the backdrop of the overall luxury car market reportedly declining by 20-25 per cent in 2019. Mercedes-Benz India has recorded a year-on-year drop in sales, amounting to 15.89 per cent, selling 9,915 units between January and September 2019, in contrast to the 11,789 units it sold in the corresponding period last year.

Even though the company said it crossed the 10,000 unit sales mark in the first week of October, Schwenk said it may not be possible to meet last year’s sales (15,538 units) and that there can be a fall, as a relatively better fourth quarter of this year will not be able to offset the three subdued quarters preceding it.

However, Schwenk said the company remains bullish about the long-term potential of the Indian market, and hopes to see a revival of customer sentiments in the coming months. He pointed out that in the first quarter of this year, the company sold 3,885 units — 2,676 units in the second quarter, followed by 3,354 units in the third quarter, which marks a sequential 25 per cent hike from the second quarter of 2019.

But the luxury car market in India still remains under-penetrated, amounting to around 1.5 per cent of the overall sales, as opposed to 13 per cent in China and 10 per cent in the US (as of January 2019).

While metro cities continue to contribute the most to the sales of the luxury-car maker, with Delhi and Mumbai accounting for almost 45 per cent of its sales, Schwenk said that the firm has been noticing increasing demand from tier II and III cities. Keeping this in mind, the company has been tapping into these markets by expanding its footprints in these cities over the past few years, by setting up small dealerships outlets as well as workshops.

‘Innovative solutions’

With the slowdown in automobiles weighing on the customer sentiments and the company, the firm has also been offering “innovative solutions” aimed at enabling customers to get better financing options. In August, it introduced ‘Wishbox’, a set of mobility solutions aimed at providing tailor-made initiatives, which involves features such as zero down payment, provision of two upgrades at no extra cost in a span of four years, and a complimentary two-year insurance programme.

Earlier this month, the firm also launched an e-commerce platform to sell new and used cars as well as branded accessories and merchandise, aimed at contributing up to 25 per cent to its annual sales by CY2025, Schwenk said. The platform is also part of the company’s larger plan to offer innovative offerings to customers at a time when sentiments are subdued.

Published on October 16, 2019
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