Not ditching diesel vehicles as customer demand is strong: Mercedes Benz India VP of sales

Santosh Iyer, MD and CEO, and Lance-Bennett, VP of Sales and Marketing, launched the new GLS 4MATIC facelift on January 9

Even as the Indian arms of other luxury carmakers like Audi and Volvo phase out diesel-powered models from their portfolio, Mercedes Benz India has decided to continue with diesel-driven cars.  A senior company official, while interacting with Moneycontrol, said that diesel-driven models flaunting the three-pointed star will remain on sale as long as there are favourable market dynamics.

“We will continue to sell diesel engines in the foreseeable future and leave the choice up to the customers. We can be flexible with our production and as you have seen, we have launched petrol and diesel variants (of the facelifted GLS).  We have diesel throughout the range, whether it is the A Class going up to S Class GLS as well. We will continue with diesel as it is a customer choice,” said Lance Bennett, vice president of sales and marketing, Mercedes Benz India.

Diesel-fired cars have been discontinued by leading carmakers globally as they are considered to be polluting, expensive to run and maintain, and pricier than petrol versions. In India, carmakers such as Maruti Suzuki and Honda Cars India have already exited this segment over the last few years.

Bennett revealed that vehicles running on diesel contribute 55 percent of the total sales at the company. "We will leave it up to the customer, we can adjust our product portfolio or production accordingly," he added.

“In the luxury segment, the cost impact of upgrading the diesel engine with advanced technologies does not impact luxury consumers significantly due to their deep pockets. Hence, luxury carmakers (like Mercedes, BMW, etc.), have the liberty to continue the diesel engines provided they meet stringent emission norms,” Gaurav Vangaal, associate director, light vehicle production forecast, Indian subcontinent, S&P Global Mobility, told Moneycontrol.

He added, “Meanwhile, in the mass segment, advancement to cleaner technologies in diesel engines have a significant impact on cost structures, hence we saw multiple carmakers move away from diesel offerings.”

Meanwhile, Mercedes Benz India has lined up 12 new launches this year out of which half are top-end vehicles (TEVs), which are priced at Rs 1 crore and above.  Also on the anvil are three electric cars, which are speculated to be EQA, EQE and EQS battery-run SUVs.

Without talking about the company’s product lines, Bennett stated, “We are always looking across product range for opportunities. We are focusing on entry, core and top-end luxury vehicles across price points for ICE (internal combustion engine) and electric."

Bennett had earlier hinted that Mercedes Benz India may adopt its international focus on electric cars if demand skews in favour of such products.

“Our global strategy is to go 100 percent electric by 2030. It won't be surprising if that happens in India as well, "Bennett had earlier told Moneycontrol. However, he clarified, “It depends on the market. We have to assess whether India's ready to go 100 percent electric by then.”

Mercedes Benz is looking to post a double-digit growth in sales this year on the back of pent-up demand for its SUVs such as the GLC, which was rolled out last year.  The German company already has an order book of 3,000 units, which it aims to reduce in the near term.