 "The luxury car segment in India is very small: Eberhard Kern")
Mercedes-Benz India launched the GLA 45 AMG urban sports utility vehicle priced at Rs 69.60 lakh (ex-showroom, Mumbai) on the back of a 150 per cent growth in sales of its performance-oriented AMG cars. This growth has helped Mercedes retain the second position in India. Edited excerpts of Swaraj Baggonkar’s interview with Eberhard Kern, managing director and chief executive of Mercedes-Benz India. Excerpts:
What is the reason for launching the AMG version of the GLA?
This is a high-performance segment. Though a small segment, but it is a very interesting one. When developing an India strategy we thought about this segment as the country had only pure sports cars. We believe this a portfolio that takes Mercedes to the next level. Including the GLA, we now have six AMG Mercedes on sale in India.
Where do you see volumes, and how were Diwali sales?
Given that we grew more than 30 per cent last year, we said we expected double digit growth this year too. In the year to September, it (growth) was 16 per cent with sales of 7,529. We might cross 10,000 this year.
Diwali sales were good. We see that the (buyer) sentiment is now better. We have a waiting list on a number of our cars like the S class, ML class, GL class, and CLA 45. The volume would have been higher if we had supplies to match.
Is there any change in demand for the A and B class compact cars?
Both of them were a huge success for the beginning. More than 3,000 A and B class cars are running on Indian roads. There is a huge demand for both of them. One out of every four Mercedes sold in India is a compact car with the GLA and CLA also part of the same family. You will see some more progress here.
Have you taken a decision on making the A and B class cars in India?
Today we make the S class, E class, C class, ML class and GL class in India. We took the decision to manufacture the CLA, which will be out with its sixth model next year. And looking at our manufacturing capacity, which is being doubled, there might be an additional model. We can’t say at present if it will be the A class or B class. With the expanded capacity, which is almost ready (20,000 cars), it makes us the luxury car maker having the biggest capacity.
When you have such good demand for the A and B class cars why do you not make them here?
Decisions on manufacturing cannot be taken on volume alone, they have much to do with the mother plant and the complexities involved. There are a lot of issues we have to think about before we begin local manufacturing.
How many dealers are you adding this year?
We are going to open 14 dealer outlets this year, of which five have already been inaugurated and nine more will be inaugurated in the final two months of the year.
The new car market in India is projected to expand to 5 million in 5-7 years. Will sales of Mercedes-Benz India grow two- or three-fold from here?
This year the total car market in India may be 2.4 million. The luxury car share is 1.4-1.5 per cent and it will go up. This luxury car share compared to other markets is low. We see potential in the Indian market.
Will Mercedes-Benz India look at exports?
I liked the approach that (Prime Minister) Narendra Modi took through the Make in India campaign.
He mentioned ease of doing business was one of the main issues for investors coming to India. Export is not an option today for us because we need high volumes of one single model, which we do not have.
What is the reason for launching the AMG version of the GLA?
This is a high-performance segment. Though a small segment, but it is a very interesting one. When developing an India strategy we thought about this segment as the country had only pure sports cars. We believe this a portfolio that takes Mercedes to the next level. Including the GLA, we now have six AMG Mercedes on sale in India.
Where do you see volumes, and how were Diwali sales?
Given that we grew more than 30 per cent last year, we said we expected double digit growth this year too. In the year to September, it (growth) was 16 per cent with sales of 7,529. We might cross 10,000 this year.
Diwali sales were good. We see that the (buyer) sentiment is now better. We have a waiting list on a number of our cars like the S class, ML class, GL class, and CLA 45. The volume would have been higher if we had supplies to match.
Is there any change in demand for the A and B class compact cars?
Both of them were a huge success for the beginning. More than 3,000 A and B class cars are running on Indian roads. There is a huge demand for both of them. One out of every four Mercedes sold in India is a compact car with the GLA and CLA also part of the same family. You will see some more progress here.
Have you taken a decision on making the A and B class cars in India?
Today we make the S class, E class, C class, ML class and GL class in India. We took the decision to manufacture the CLA, which will be out with its sixth model next year. And looking at our manufacturing capacity, which is being doubled, there might be an additional model. We can’t say at present if it will be the A class or B class. With the expanded capacity, which is almost ready (20,000 cars), it makes us the luxury car maker having the biggest capacity.
When you have such good demand for the A and B class cars why do you not make them here?
Decisions on manufacturing cannot be taken on volume alone, they have much to do with the mother plant and the complexities involved. There are a lot of issues we have to think about before we begin local manufacturing.
How many dealers are you adding this year?
We are going to open 14 dealer outlets this year, of which five have already been inaugurated and nine more will be inaugurated in the final two months of the year.
The new car market in India is projected to expand to 5 million in 5-7 years. Will sales of Mercedes-Benz India grow two- or three-fold from here?
This year the total car market in India may be 2.4 million. The luxury car share is 1.4-1.5 per cent and it will go up. This luxury car share compared to other markets is low. We see potential in the Indian market.
Will Mercedes-Benz India look at exports?
I liked the approach that (Prime Minister) Narendra Modi took through the Make in India campaign.
He mentioned ease of doing business was one of the main issues for investors coming to India. Export is not an option today for us because we need high volumes of one single model, which we do not have.