Santosh Iyer, the sales and marketing head of Mercedes-Benz India, feels that systematic investment plans (SIP) are preferred investments over buying luxury cars.
Indian mutual funds have about 5.93 crore (59.3 million) SIP accounts. SIPs are the preferred instruments for investors who regularly invest in MF schemes, according to data released by the Association of Mutual Funds in India (AMFI).
"While the luxury car industry is growing at one of its fastest paces post-pandemic, actual sales are a far cry from potential and wealth that India carries," Iyer told the Times of India in an interview.
Some 141.44 lakh new SIP accounts were registered from April to October in 2022, despite volatility in stock markets, according to AMFI. Commenting on the shift in the way Indian buyers are now using their disposable income Iyer said: "Disposable incomes into aspirational and premium products such as cars are not as widespread as they should be."
Iyer explained the state of the luxury car market by showing the gap between prospective buyers who inquire about cars and the number of cars sold, citing that many buyers now wait for a dip in the market or decide to continue their SIPs, instead of purchasing cars.
"While there are 15,000 people inquiring about luxury cars every month, the actual order size is about 1500 units. So, there are still 13,500 customers who desire to own a Mercedes-Benz, but postpone their purchase thinking that its fine, maybe, I should continue (with) my SIP or maybe the next dip (in markets) is there," he said.
The Mercedes sales and marketing head has also asked his sales team to look into the issue of SIP investments in order to realise higher growth rates.
"They (SIPs) are our competitors, I tell my team if you are able to break that (SIP investment) cycle, then exponential growth is a given,” Iyer told the Times of India. He will take over as MD and CEO of Mercedes India operations from January.
Kirtan A Shah, the founder of Credence Wealth Advisors (CWA), reacted to the statement by Mercedes and called the statement a 'marketing tool'.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
