Things have been going well for Mercedes-Benz lately in India after the launch of new models. The company has been doing well in recent months. Martin Schwenk, Managing Director and CEO of Mercedes-Benz India, details the company’s plans to Vivek Phadnis of DH. Extracts:
How has it been for Mercedes-Benz lately?
Overall we are doing well at the moment. The pandemic has been very harsh and every city was massively affected in April-May of this year. We have seen a V-shaped recovery as a brand. From June, July and August, we saw sales figures equal to the situation before the pandemic. So overall we have seen a recovery in sales. Most of the markets are doing very well and we have high hopes for the next two months.
What bothers everyone a bit is a supply constraint. While we didn’t want to cut production, we had some production delays, where you have to wait a few weeks or even two to three months if you want to get SUVs, for example. This is due to global supply constraints. But overall, from a business perspective, we are very confident and happy with how the past two months have developed.
Some companies are struggling with rising commodity prices. Did it affect Mercedes-Benz?
Yes, we have had price increases. It is not possible with the margins that we have. We didn’t get it all out to the customers. You have to see how things evolve.
For example, the cost of freight is also an issue. Many of our suppliers come from Europe. The weaker rupee against the euro is a downside that we have tried to offset to some extent. But that remains a topic that we are following at the moment. We did not anticipate an immediate price increase. Hope we can keep the prices stable for some time. It is a concern.
Can you describe your new product strategy?
This year we have had a substantial refresh of our products. We had the GLA, the new E-Class, the S-Class CBU version. The first big step will be the S-Class, but in the medium term we see a lot of movement globally with electric vehicles. So, we will also see which electric vehicle we will bring to India. We still have to decide whether we are going to import or do local production. But this is one of the steps to come.
What are your electric vehicle projects for India?
We take a step by step approach in India. In January 2020, we launched the EQ brand, and under that we said that we would bring electric vehicles. About a year ago, we introduced EQC in six metropolitan cities, but we haven’t made it available across the network.
The next step we are doing is expanding the network. We will sell and service the EQC through our dealers in India. We are trying to develop the market now. We are trying to see which of our other vehicles fit into the Indian market. We haven’t decided yet, but I’m sure we’ll do something in the future. It’s a step-by-step approach. Brand, first car, network, increase. This is the rough plan.
What are your expectations for the next Christmas and New Year celebrations?
I am very optimistic. We have seen over the past two weeks that the demand situation is similar to that before the pandemic. I think we’ve all adapted and evolved to some extent in our lives. It means we see people walking into showrooms, buying cars, and celebrating again as much as possible. I am optimistic. Will we have other waves? Who knows? We have to take it step by step. We have seen the economy and businesses are resilient.