Mercedes India sales mark first drop in 5 years, BMW grows

Swaraj BaggonkarMoneycontrolIndia’s largest luxury car maker Mercedes-Benz recorded its first decline in sales, in five years hurt badly by the court-imposed eight-month ban on sale of diesel cars in Delhi-NCR. The Pune-based company clocked sales of 13,231 units in January-December 2016, a drop of 2 percent over 13,502 units sold in Calendar Year 2015.  Sales stagnated for the luxury car maker last year when the Supreme Court imposed a ban on sale of diesel car having more than 2 litre engines over pollution concerns.  The ban, which was imposed in December 2015 was lifted in August last year after the Apex court asked the authorities to impose a 1 percent environment cess on sale of such vehicles.  Roland Folger, Managing Director and CEO at Mercedes-Benz India said, "2016 was a year of market challenges but despite facing such challenges, it is quite satisfying for us to have made the best of the opportunities that we had. We remain bullish on our outlook for 2017." The ban on sales of large diesel cars coupled with excise duty hike and demonetisation took a toll on demand for luxury cars in India. At around 35,000 units, sales of luxury cars in India in 2016 are expected to remain stagnant compared to 2015.  "If not for the ban in Delhi-NCR our sales would have closed with a double-digit growth," said a Mercedes-Benz executive. Mercedes-Benz launched 15 products in 2015 followed by 12 last year. It is expected to launch at least 9 products this year. Meanwhile, BMW said it delivered 7,861 cars in 2016 posting a growth of 14 percent as compared to 2015. The German carmaker clocked 6,890 unit sales. BMW is the third largest luxury car maker in India after Mercedes-Benz and Audi. Despite the growth, BMW managed to only beat its 2013 total which was 7,327 units as sales in 2014 and 2015 stood at 6812 units and 6890 units respectively.  Frank Schloeder, President (act.), BMW Group India said, "2016 has not been an easy year for the automotive industry and that applies equally to BMW Group India. During the course of the year, developments in the Indian economy and policy framework shook the mechanisms of the auto industry. BMW Group India was faced with challenges no less than any other automobile manufacturer and was confronted with strong pressure from the beginning of the year. Despite a challenging business environment, BMW Group India has increased sales and market share.”