Focus to reduce delivery waiting period, says Mercedes-Benz India

Prices of all models to be hiked by 5% from April 1

Mercedes-Benz India is moving “a bit slow” in terms of new launches and prioritising current customer demand by reducing waiting periods for deliveries, its Managing Director and Chief Executive Officer (CEO) Santosh Iyer said on Thursday.

The company has over 4,000 bookings, and its waiting period is between two and eight months, Iyer told Business Standard in an interview. India’s largest luxury carmaker sold 15,822 units in 2022.

“When I say a two-month waiting period, this used to be 3-4 months last year. For many car models, we have been able to reduce this waiting period, which is coming down each year with increased production,” he added.

On Thursday, the company announced that prices of all models will increase by up to five per cent, primarily due to persistent depreciation of the rupee and the escalating costs of logistics, April 1 onwards. This is the second price hike by the German company this year. The first price hike, which was also up to five per cent, was done on January 1.

Iyer said the company was conscious of the fact that this was the second price hike after January. “However, for sustainable growth in India, these price hikes are inevitable,” he added.

In January, Mercedes-Benz announced that it will launch 10 new vehicles in India in 2023, with a majority in the over Rs 1-crore price category.

“We have ten launches planned for the year. We have done one launch. We have gone a bit slow on the launches because we want to cater to the current customer demand and reduce the waiting period,” Iyer said on Thursday.

The company has estimated demand momentum to continue in India, and therefore, it is “cautiously optimistic” about the double-digit growth in spite of the price increases, he said.

This year has started on a strong note for Mercedes-Benz India, and the first two months have seen good demand. “On the other side, what we have seen is the deterioration of the rupee as the Euro has become much stronger. In October, one Euro was around Rs 79, and now, it has gone up to Rs 89. That is one major issue,” Iyer said.

“The logistics costs (transport and storage) have gone up. Not just the semiconductor chips, we airlift trim-level parts, too. We have to look at alternative modes of transport, and that is also increasing our costs. Also, the new regulations are playing a part in price hikes,” he added.

He said prices last year, on average, went up 6-7 per cent. “This year, we cannot rule out hikes of up to 10 per cent. If the exchange rate situation does not change, one has to react. The inflationary increases would be up to 10 per cent in 2023, and we can see that,” he added.