Mercedes-Benz India outgoing Managing Director and Chief Executive Officer, Martin Schwenk has said high taxation regime in India remains a barrier in the Indian luxury car market growth, limiting to only 38,000-40,000 units per annum. The company on Friday launched GLB and EQB luxury seven-seater sports utility vehicles — three powertrains (petrol, diesel and electric) simultaneously launched in India — a first by a manufacturer.
While, the EQB (electric) is priced at ₹74.5 lakh, the GLB range is priced between ₹63.8 lakh and ₹69.8 lakh (ex-showroom). Under Schwenk’s leadership in the last four years, Mercedes-Benz has taken several initiatives including local assembly of AMG performance vehicles in India with the AMG GLC 43 4MATIC Coupé and ‘Retail of the Future’, a direct-to-customer sales model. In an interview with businessline, Schwenk shared his experience in India. Edited excerpts:
How has been your four years in India?
Four years is a long enough time to adjust... We had also had some tough times during Covid and it was a learning for us all, and at the same time when you operationally manage the crisis, you still must keep your view on positive crisis. During these most crisis time, we launched ‘Retail of the Future’, working on the future and create a lot of hope and energy for going forward...so managing the operational problems and at the same time, working on long term goal.
You have priced the EQB attractive as it is not making a much of a difference between its siblings with internal combustion engines. How did you manage that, even though they are all imported vehicles? Do you plan to manufacture them here as well?
I think it’s good to start like this...we have no plans yet to manufacture them here. But, having said that there is a room for these models (to be made in India). With the seven-seater configuration on both models, these cars will mostly compete against each other and for me it’s very interesting to see how the electric version will win or not against the ICE version. But, how it fits our line-up also along with the future GLC (by the second-half of next year), we have to see. This will have additional, significant upgrades on features and technology too, which also comes with a price adjustment. So, we believe we have a good spot here for the customers, with what we offer here with these models.
You have also seen more young buyers going for luxury brands in the last few years. Do you think that trend will continue in India now?
We have consistently seen that we have a higher number of younger customers. We have also seen a higher share of salaried customers, besides traditional entrepreneurs, business owners and doctors. So, now I would expect that with a growing corporate environment structured employment, we will certainly see a potential growth, just by the shift of this type of demographics. And, on top of that we see many women customers. Overall, the culture of customers is changing. Of course, that goes gradually as we have to look here in 5-10 years time frames, and not talking about one or two years.
But, the Indian luxury car market remains in the bracket of 35,000-40,000 units per annum. Where do you see the challenges and how can it be improved?
We have talked about consumer shifting and also shift towards electric should help. But, I would hope GST/taxation remains the same across size of the cars and power of cars because that would also help in bridging the gap between the premium and luxury cars. In terms of product portfolio, we offer almost 25 cars with different models. I don’t have an idea of what else we could do in that sense...footprints, franchise partners, we are basically in every major area available, so the growth has to come from attractive products and attracting new customers who like spending on themselves...but that is a gradual change and it will take time and not help in a rapid growth.