India: the land of opportunity for Mercedes-Benz

Carmaker, Mercedes-Benz is gearing its new sales strategy toward the newly rich in South Asia, India.

Mercedes believes that focusing on young Indian billionaires could boost sales of its luxury vehicles faster than mass-market vehicles, a senior company official said. “The growing number of “dollar millionaires” in India includes young entrepreneurs or high-income professionals who appreciate the luxury element and technology of cars,” said Martin Schwenk, Managing Director of Mercedes-Benz India.

According to automotive market data provider JATO Dynamics, this market is all the more interesting as Mercedes is the best-selling brand in the Indian market with a 40 % market share, compared to its competitors like Audi, Jaguar Land Rover and BMW.

In fact, Mercedes’ sales in India have increased by more than 40% to 11,242 vehicles in 2021, after reaching its lowest level of 7,893 cars in 2020, a year marked by the Covid-19 rankhaya.com pandemic. However, sales in 2021 remained below 2018 pre-pandemic levels, estimated at 15,500 vehicles sold in 2018.

But, Mercedes recorded 80 % growth in high-end models costing more than 10 million rupees ($131,337), such as the GLS, S-Class and GLS Maybach.

However, Mercedes and other carmakers are facing two major challenges: semiconductor shortages and logistical problems, due to the Covid-19 pandemic, and geopolitical issues related to Russia‘s invasion of Ukraine. As a result, we are seeing lead times that can exceed six months in some cases, Martin Schwenk said.

“We have very good sales momentum, the concerns are on the supply side. Congestion at the ports is causing really big delays and that is hampering our production,” he said.

India’s lower taxes on luxury cars could benefit the segment’s growth and the car market. This year, Mercedes-Benz aims to launch ten models, including its first 100% electric sedan, the new EQS.