Mercedes-Benz, the renowned German carmaker, foresees India emerging as its third-largest market within the ‘Region Overseas’ in the next 2-3 years. This projection is rooted in the sustained demand for luxury automobiles, as indicated by a senior executive of the company. The ‘Region Overseas’ encompasses 118 countries, excluding North America, Europe, and China, and India currently holds the fifth position in this region, following Japan, South Korea, Australia, and Turkey.
Growth Trajectory in India
The sales differential between India and Turkey stands at approximately 8,000 units annually. Mercedes-Benz AG Head of Region Overseas, Sagree Sardien, emphasized the strategic significance of India, highlighting its pivotal role in shaping the brand’s future trajectory. Sardien expressed confidence in India’s potential to ascend the ranks within the Mercedes-Benz market, envisioning this transition within the coming years.
Strategic Market and Expansion Plans
Describing India as a strategic market, Sardien underscored the brand’s robust performance in the high-end segment, marked by double-digit growth in sales over the past few years. This growth trajectory is expected to persist, buoyed by the introduction of 12 new models, including three battery electric vehicles, slated for release this year. Furthermore, Mercedes-Benz intends to broaden its footprint by venturing into smaller cities, with plans to establish sales outlets in 10 new locations spanning from Jammu to Kottayam.
Electrification Journey and Future Outlook
Mercedes-Benz India reported record-breaking sales of 17,408 units in 2023, indicating a promising market reception. Sardien noted a gradual uptick in the electrification journey within India, with electric vehicles (EVs) constituting 4% of total sales. Anticipating a surge in demand for EVs, she expressed confidence in achieving double-digit growth in this segment.
Customer-Centric Approach
Despite the burgeoning shift towards electric mobility, Mercedes-Benz remains committed to aligning its strategic direction with evolving customer preferences. Sardien emphasized the brand’s adaptability while maintaining a steadfast commitment to electrification. However, she acknowledged the necessity of synchronizing with customers’ transformational pace and market dynamics.
Future Prospects and Market Potential
Looking ahead, Sardien envisions the luxury car market in India reaching the milestone of 1 lakh units by the end of the decade. Nonetheless, she highlighted the imperative for fundamental market transformations, particularly concerning the transition from traditional combustion engines to battery electric vehicle architectures. Currently, the luxury car market in India stands at approximately 47,000 units annually, constituting a fraction of the broader passenger vehicle segment, which surpassed the 41 lakh units mark last year.
