German luxury carmaker Mercedes-Benz plans to launch four new electric vehicles in India in the next 8-12 months to accelerate its electric vehicle development, Mercedes-Benz’s head of overseas regions Matthias Luehrs said on Thursday.
The company expects 25% of its total India sales to come from electric vehicles in India by 2027.
“We are very satisfied with the development of our EV (electric vehicles) in the Indian market, which includes models like EQS and EQB. We will launch four more vehicles,” Luehrs told reporters in an interaction.
The company currently sells four luxury electric car models in the Indian market – EQS, EQB, EQC and EQS AMG.
Regarding sales expectations for India’s electric vehicle portfolio, Luehrs said: “This is our planning assumption that electric vehicle sales will account for 25% of total sales in the next four years.” Currently, electric vehicle sales account for about 3% of the company’s total sales in India.
Last year, Mercedes-Benz India’s total sales grew by 41% to a record 15,822 units as compared to 11,242 units sold a year ago. The previous highest sales volume was in 2018, with 15,583 units sold.
When asked when the four new electric models will be launched, Mercedes-Benz India Managing Director and CEO Santosh Iyer said they will be launched in the next 8 to 12 months, with both fully assembled units and fully disassembled units being imported at the company’s Chakan plant.
Talking about the market potential here, Luers said that currently, India is the fifth largest market for Mercedes-Benz in the “overseas” region, which includes 120 markets outside Germany, the United States, the United Kingdom and China. South Korea, Japan, Australia and Türkiye are ahead of India in the company’s overseas market rankings.
Asked if India could upgrade, he said it was possible that India could become the fourth in the next two years.
“The factor that makes us very optimistic is that we see a huge change in the customer mix in India,” Ruhrs said of the company’s bullishness on India.
Currently, the average age of buyers of the company’s premium sedan, the S-Class, is 38 and that of the C-segment is 35, “which is 10 years younger than 10 years ago… We are seeing 15 per cent female customers, which is 10 per cent more than 10 years ago,” he said, adding that customers in India are also very quick and keen to adopt new technologies offered by the company.
When asked whether high taxes have hindered the growth of the luxury car market in India, Ruels said: “Generally speaking, any higher taxes will hinder the sale of cars or goods, but that is normal.” While different markets around the world have their peculiarities and therefore cannot be compared, he said, “But obviously if you have a market with less taxes, then you will sell more cars. It is very obvious. It is the case in the United States, it is the case in Europe, it is the case in China. So, obviously, if you have more taxes, the niche market becomes smaller.”
Asked about the impact of regulatory challenges, he said: “All I can say is that we have been operating globally since 100 years and in various markets, regulations are constantly changing, up and down, left and right. And, in Germany, India, China, the United States, we are all adapting to it. That is why we are the leading luxury company in the automotive market. So we just adapt to the regulations, some of which are more beneficial than others.”
“When new regulations first come up, it’s a new hurdle, a new challenge,” he said, adding, “We deal with the challenge. We have an idea of how to deal with it. A month or two, if you will, will obviously slow down the process, but then, we will manage, we have new suppliers and we will manage them.” On whether more predictability helps plan the business better, Luehrs said this is not an issue unique to the Indian market, but is an international topic.
“You can more easily adapt to any new regulations while doing business with longer lead times,” he said.
