Mercedes-Benz India’s MD and CEO Martin Schwenk
Mercedes-Benz India’s MD and CEO Martin Schwenk announced that the auto giant closed the last year with a substantial growth in sales of its luxury cars, pushing them to top slot in the luxury segment in India again for the seventh year running. Key highlights from last year include effectively changing their retail strategy to include a direct to consumer channel, aggressive launches and with a gameplan to bring in their latest electric vehicles to buyers.
Schwenk told Moneycontrol in an interview that he will launch ten brand new cars this year, enhance the company’s AMG or sports sub brand presence nationally, and the third wave notwithstanding expects the industry to remain steady.
Edited excerpts
You’ve grown by almost 40 percent in volumes in a very tough market - what helped you to achieve that?
We were able to recover relatively quickly as it helped that we didn’t have the same heavy lockdowns in the first year so we didn’t have zero business, which was one reason, and the second was that we had strong products launched. There were 13 different cars and that helped drive the way forward along with the managing of the market and the overall situation – it has also helped set a strong foundation for the year forward.
Which cars of yours were the best-sellers in terms of volumes and what was the pie of SUVs versus sedans?
The best seller was the E Class long wheel base and on the SUV side the GLC, which was the highest selling. It was roughly around 50% each, a little higher sometimes on SUVs and sometimes on sedans from year to year.
The Prime Minister was reported to be using an S Guard armoured Mercedes car recently? Is that a switch from the armoured BMW 7 Series he was known to use?
We don't as a matter of policy issue any official statements on high security vehicles.
You say you are launching ten new cars this year?The ones we discussed are the new Maybach S Class in March, and then the big paradigm shift is EQS, which is the flagship in our electric vehicle segment and will be a reference for the space in terms of what an EV car should look like and is a completely new product. The new C Class is up for a refresh and that’s also going to be coming this year.
How do you see the retail channel evolving given the direct-to-customer push ?
Our overall plan is focused on quality as opposed to quantity, and we have 95 outlets in 50 cities across the country. With the physical footprint and the quality with upgradation of facilities and the implementation of our strategy, we will add AMG performance centres where there is a need. So there is no plan to massively increase outlets as such.
How many AMG cars did you sell last year? How many centres may you open?Globally we sold 146,000 AMG cars and in India we have grown by over 100 percent, with sales of those being in the triple digits in the past. We are not committing to exactly how many centres but it will be across metro cities and will depend on our strategy and as the year goes along.
Give us a sense of whether your localisation strategy is pushing higher in terms of the content you source here?
It comes down to how you define local content but we can’t get very high because anything that involves a lot of tooling can't be localized. Yes, it is happening but not to a very high level. Here's why. If I cannot generate higher volumes per model line, then l have challenges in deeper localisation. It's always a calculation that factors in tooling, duties and logistics and we are always assessing how to balance that but to your question, it is the low volumes holding us back.
Do you expect the current year to grow with a similar trajectory?
We will see significant growth, maybe double-digit growth but it will depend on the supply situation and of chips and all but we also as we all know have a new wave in front of us. I am expecting that we should be able to mitigate the conditions brought up by Covid better. The supply, of course, will depend on many market headwinds and that will remain to be seen but the models launched this past year and what we have coming should set the foundation for better times.
The biggest challenge for luxury car-makers to drive large volumes are government taxes....In the end we have to focus on our strengths and that means only bringing in our widest portfolio and the largest retail footprint. The discussions with lawmakers on huge upside in terms of not just taxes but also employment and tech transfer would be a strategic tack for the government to take. So to grow the market in the premium and luxury car segment - can also attract more labour more components and is a stronger development of the economy but that is a strategic decision in the end. But for now we work in the framework we have.
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