VW scandal not a question mark over diesel engine tech: Mercedes

Volkswagen had admitted to employing a 'defeat device' in over 11 million diesel vehicles which led to manipulation of emission tests

German luxury carmaker Mercedes-Benz today said the emission scandal involving compatriot Volkswagen cannot be a reason to question capabilities and technical advances of diesel engine technology.

The company, which reported 34% increase in sales in January-September this year, also said the scandal has not affected sales of its diesel vehicles in India.

"This scandal has nothing to do with the performance (of diesel car sales)... I don't believe that (scandal) is a reason to question capabilities and technical advances of what you can do with diesel," Mercedes-Benz India MD and CEO Roland Folger told reporters here.

Volkswagen had admitted to employing a 'defeat device' in over 11 million diesel vehicles sold in the US, Europe and other markets which led to manipulation of emission tests. The company is facing fines of up to $18 billion in the US.

When asked if sales have been affected by the scandal, he said: "We at Mercedes have not seen any impact on our diesel sales at all."

Folger, who took over as new Mercedes-Benz India head earlier this month, said he expects the company to continue reporting good growth in the Indian market.

The company reported sales of 10,079 units in India during January-September this year, which is almost the entire volume it sold in 2014.

"We are very comfortable looking into future that what we will see from now is a continuous success story. If nothing major changes, this will continue from our perspertcive... that's why we are bullish and very positive in our brand expectations for the next coming year."

He said the new vehicles launched by the company will help its sales growth. The company launched 13 products, including the GLE, Mercedes-Maybach, the CLA, the new C 220 CDI and the new B-Class, among others, this year.

"When we launch vehicles, they don't immediately contribute fully 100% to the overall potential of that specific segment... Most of the vehicles we just introduced last year are really going to be contributing to our market presence in a true sense only in the forthcoming year," he added.

Folger said Mercedes-Benz expects future growth to come from smaller towns, beyond the four metros.

"We believe that there is equally strong growth in the smaller towns. We believe there is much more growth than what we can see at the moment," he added.

Stating that there are pockets in small towns with relatively high income, but with very low exposure to high-end luxury cars, Folger said the company will look to tap those areas.

"We are also putting our dealers in such places and we are investing in these areas. We believe future growth will come from these areas," he added.

At present, Mercedes-Benz has 80 dealerships across 39 cities. It also opened dealerships in smaller cities such as Jamshedpur, Calicut and Raipur this year.