Mercedes-Benz India recorded its best year in its history in 2022 and posted record sales of 15,822 units. The German company’s Global chief executive officer (CEO) Ola Kallenius, in an interview with CNBC-TV18, said that India was Mercedes-Benz’s fastest-growing market worldwide in 2022.
Kallenius added that India’s this growth momentum will help us to invest more in the country. He said, “India was our fastest growing market in 2022 and we also introduced new business models, one of the first carmakers to switch over to direct sales in our sales and marketing organisation.”
Mercedes-Benz India sold 11,242 units in 2021 and its previous best sales were achieved in 2018 at 15,583 units. Moreover, the company, in 2022, managed to sell more than 3,500 cars priced above Rs 1 crore last year, and still has a backlog of around 6,000 cars. The company’s top-end vehicles include S-Class Maybach, GLS Maybach, top-end AMGs, S-Class and GLS SUV, which are priced over Rs 1 crore (ex-showroom).
“We installed the first high-power charging network for the customers that are venturing into our electric cars. This is the first market after Germany to actually produce our electric flagship, the EQS. So there is a lot of momentum here and I believe that that momentum can continue. So we will continue investing in India,” Kallenius further added.
India is the second biggest technology and engineering hub for Mercedes, said the CEO of the luxury carmaker while adding that “We have more than 5,000 engineers in Bangalore working on the future innovations for Mercedes everywhere in the world, a large part of our IT team, and of course, our sales and operations team here as well. I'm very, very impressed with the progress that we have made here as a company since my last visit about five years ago.”
The global CEO of Mercedes-Benz’s said that in all fields, whether it is the software and digital field, electrical field, or also more classical mechanical technologists that are also evolving, our team here in India in Bangalore is involved in all of those. So there's a piece of India in every Mercedes that we sell around the world and I think there's potential to do even more with our team here in India.
Doubling down on electrification
While talking about the company’s expansion plans in India, Kallenius said, “The journey is towards zero-emission, we are decarbonising our complete business system, from A to Z, supply chain, our own operations, the product and the product in use. In fact, we have decided a brand like Mercedes Benz needs to stand for a promise of a better future. It's a blend of technology, innovation, and luxury. So, yes, we are doubling down on electrification, allocating our capital, allocating our engineering resources towards this.”
He also stated that Mercedes-Benz is seeing a dynamic innovation environment in the electric vehicles (EVs) batteries. “Where a lot of capital meets intelligence, usually, you get a dynamic innovation environment and that's what we are seeing in the battery space at the moment,” said Kallenius.
Mercedes-Benz India’s Managing Director & CEO Santosh Iyer recently stated that the company is also working on reducing wait times to around 6 months from up to 9 months. He further also revealed a big demographic shift among buyers, and said, "We have more women buyers buying Mercedes Benz cars, an average age for an S Class buyers has come down to 38 years, for a C Class its 35 and salaried class are also increasingly buying Mercedes Benz cars."
He further said bringing more products into the TEV segment will be a part of the company’s "six pillars" strategy for 2023. The company is looking at an overall double-digit sales growth this year, and as part of the drive also plans to launch ten new vehicles in India in 2023 with the majority in the over Rs 1 crore price category.
Mercedes-Benz India will also take the lead in electric vehicles, and is looking at more EVs to enhance its product portfolio to add to the existing models EQC, EQB, EQS 53 AMG and EQS 580, he added.
India-EU FTA’s impact on Mercedes-Benz’s export plans
Kallenius said, “It’s also what do the free trade agreements look like between the different markets, your target export markets, can we reduce barriers for trade, imports and exports in both directions. Those are things that where maybe policymakers can also look to, let us say act as a catalyst to make that happen sooner. But it's also correlated, obviously to the market size of that potential export.”
While talking about Budget 2023, Iyer stated that he wants policy consistency and continuation of GST benefits on EVs for 5-10 years. He also added that “India has one of the most stringent regulatory environments when it comes to EVs or certification or CAFE (Corporate Average Fuel Economy) II norms.”
In terms of the growth outlook for 2023, Iyer said, "We are looking at profitable and resilient growth. We are aiming for double-digit growth. A sustained growth helps us to also do more investment and therefore it’s important that we focus on the profitability and resilient growth for the market.”