India needs to review the overall taxation of premium luxury vehicles, which is slowing the growth of such vehicles in the country, Martin Schwenek, MD and CEO, Mercedes-Benz India.
“Duties, plans, taxation is a heavy burden … which is slowing down growth. Therefore, we will have growth, but not exponential growth,” said Mr. Schwank. He said, “For really strong growth , We will need more measures than a manufacturer …. We can only do so much in terms of cost, “he said.
He said the company on Tuesday, unveiled the new E-Class starting at Rs 63.6 lakh, which is currently not an ‘active thinking’ of using India as a production hub due to lack of domestic production.
Mr. Schwenek said the company is currently producing 11 models locally and may see another increase in the next few months, but that will not change the way they operate in India.
“Deeper localization will require higher volumes from many models. We have seen the PLI plan… complication for us, any production to be set up in India will also require a strong domestic market, “he said.” And that means we have thousands of one model. Which we will make here. Now, you see our numbers, we are far from there.
“And without a strong domestic footprint, it is very difficult to invest here and then basically export to other countries because then a necessary link is missing,” said the MD. “Therefore, in terms of domestic consumption, we first need to have a strong footprint and with that we can move forward,” he said.
Talking about the E-Class, he said that it remained one of the most successful products in the company’s portfolio and about 30% of his volume came from the E-Class.
“It is about 15% of the entire luxury car market. The new car looks, quite an improvement over the previous model in terms of technology… This year our sedan segment is one of our key focus areas and we are confident that the E-Class will continue to be the most successful luxury sedan in India. ”
When asked about the outlook for the upcoming year, he said that while the company would not reach the 2018 versions – which was a record sales year for the company, it had expected a 40% increase on the epidemic hit last year.
“Overall the situation has improved, more than we thought … and now has seen in the last four-five months … in very good numbers every month, I believe we are on a real recovery in the market. So I I am very optimistic and will also move forward.
He said the company was also seeing strong demand from the e-commerce channel. Mercedes-Benz introduced its e-commerce platform in April last year, contributing about 15% of the company’s annual sales. “We sold about 1200 cars, including used cars, and this was about 15% of our sales last year, originally from an online channel,” he said.
On supply side issues, Mr Schwenek said, “Clearly, semiconductor is not our biggest issue … we can maneuver around it. For us, it’s more about direct supply, constraints on containers. And the whole shipment situation is a bit more complicated, but we also had barriers to travel restrictions and support from Germany to ramp us up. So it’s a mix of many elements. But more or less we are hopeful about that situation Huh. “
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