Mercedes on track to continue record sales in 2023 amid surging demand

German luxury carmaker Mercedes-Benz expects 2023 to turn out to be its best year in terms of sales in India as the demand for high-end cars continues to grow post the Covid pandemic, according to a top company official.

The carmaker, which sold 15,822 units in the Indian market in 2022, its highest ever in the country so far, anticipates the overall luxury car segment to post its best ever performance this calendar year.

In an interaction with PTI, Mercedes-Benz India MD and CEO Santosh Iyer said the company reported a 13 per cent year-on-year growth in its sales at 8,528 units in India in the first half of 2023, its best-ever half-yearly sales in the country.

"We are now coming into the third quarter of this year, and we feel the trend should continue which should mean that we should be able to end this year on a record high once again," he noted.

Iyer said the company expects double digit sales growth this year even as multiple challenges exist in the market.

"There is a lot of uncertainty still coming from the exchange rate...interest rates are further going up. So you know we still have three and a half months to go for the year to get over... so outlook wise we can still be confident it should be around the double digit mark," he stated.

Iyer noted that more and more customers are now opting for costlier trims across its product range, which was not the case earlier.

He said that Mercedes-Benz globally believes that it is more important to provide the right experience and right kind of equipment to a customer than just focus on attaining sales numbers.

"We feel what's more important is to do the right things, get the right products, equipment, get the right customer experience, because that should then drive volumes. It will be an outcome of what we are trying to do," he noted.

On the overall domestic luxury car market, which roughly accounts for just 1 per cent of the overall passenger vehicle industry currently, he noted that the segment could end somewhere in the region of 45,000 cars this year making it the best so far.

"This year we can see the market growing with everybody participating and that's a great sign for the overall health of the luxury car market," Iyer stated.

He noted that demand is increasing with new set of buyers, including women and salaried employees, also opting for luxury cars.

"There is an increasing trend to reward yourself with luxury products... the volumes will come, it's just a matter of time," Iyer said.

He noted that in the top 7-8 cities in India the penetration for luxury cars has already crossed 2 per cent and it's a matter of time that the rest of the country also catches up.

When asked about battery electric vehicles, Iyer said the three electric models it sells currently in the market account for around 4-5 per cent of its total sales.

"It's a matter of time that this market matures and we see more adoption," he stated.

Mercedes expects 25 per cent of its sales in India to come from electric vehicles in the next five years.

When asked if the company could bring in more electric cars, Iyer said: "Of course there is a roadmap. We feel we have to be patient here, because a lot of questions are still unanswered from the consumer perspective, and it is a job of us as OEMs to educate consumers."

So it takes some time and three to four years is a reasonable period to do that, he added.

"To go to 25 per cent (share of EV sales) if you're rushing for volumes, even now we can get more products...but I think we want to read the market," Iyer said.

He noted that growth of charging infrastructure and educating the customer about the technology would help in the growth of the overall adoption of the electric cars in the country.

The company has recently announced the extension of its electric vehicle charging network to the customers of other brands as it looks to accelerate faster adoption of electric vehicles in the country.

"We feel that the more the EV ecosystem grows, the more will be the growth of brands ," Iyer noted.