MUMBAI: The three-pointed star, the leader in India’s luxury-car space, is steadily climbing up the ladder in the overall automobile market as well.
Mercedes-Benz sold more vehicles in India in the first six months of 2017 than brands such as Fiat, Nissan and Chevrolet, which offer much cheaper, including entry-level, cars here. And, Skoda, with its more affordable line of luxury, is at a sniffing distance, as the German company climbed to the 12 position by volume in India’s automotive market comprising 18-20 companies, from 15 a few years back.
In terms of revenue, with close to a billion dollars a year, Mercedes-Benz is probably better off than more foreign companies that produce mass-market cars in India, such as Renault, Ford and Volkswagen. It is a profitable business as well.
Mercedes-Benz India sold 7,171 vehicles in the first six months of 2017, growing 9% from a year earlier, according to numbers released by the company on Friday. Sales of Nissanbranded cars totalled 6,900 units, while those were 6,579 at Chevrolet, which announced a plan to withdraw from the Indian market by the end of this year. Fiat recorded sales of 1,892 cars spotting its brand and Skoda Auto sold 7,576 units. In calendar 2016, both Nissan and Chevrolet had sold more cars than Mercedes in Ind ..
To be sure, all these automakers are still small in terms of volume in a market that sold more than 3 million vehicles in the year through March 2017, with Maruti Suzuki accounting for about half of it. The luxury space in India, which is just about 1% of the overall market, though offers fatter margins, allowing companies such as Mercedes to do better financially than most others in the mass car market.
Mercedes-Benz expects the momentum in its performance to continue, with a strong order book supporting the optimism. The company, as well as most other automakers, had offered large incentives in June, ahead of the implementation of goods and services tax from July 1. The rate under GST is lower than the combined taxes under the earlier regime, and the incentives were to lure buyers who could have otherwise waited for the GST to become effective. The offers had driven up demand in June, and Merc ..
“There was no disruption in demand due to benefits extended to the customers in June; they know we live up to our promise. With the price benefit given by the government (under GST), our growth will be stronger,” Michael Jopp, vice-president of sales and marketing at Mercedes-Benz India, told ET. The company’s goal, he said, is to grow by double digits.
The oldest luxury-car maker in India, which sells as many as 22 models here including nine locally produced, is next only to Maruti Suzuki on product portfolio in this market.
Much like Maruti in the overall car market, Mercedes has in the past few years become a barometer of the performance of the luxury vehicle space. In 2015, when Mercedes’ volumes grew 30%, the overall luxury car market expanded 13%. When Mercedes posted a flattish number in 2016, the overall luxury car market registered a 2 decline.
Mercedes has the deepest network among luxury carmakers, with 87 outlets. One of the big differentiator between Mercedes and other luxury carmakers is that it has been able to draw buyers across segments, right from entry luxury cars to the top of the line AMG models, where it has more than half the market.