Great products, team and dealers make us a success in India: Mercedes-Benz

Member of the board of management at Daimler AG, Britta Seeger, says companies need to acclimatise to the changing environment

Mercedes-Benz has been ruling the Indian luxury car market for three consecutive years (40 per cent share) in spite of challenging conditions. Britta Seeger, member of the board of management at Daimler AG (overseeing marketing and sales), tells Ajay Modi that products and dealers have been behind this feat. Talking about the uncertainties in the Indian market, Seeger says companies need to acclimatise to the changing environment and move ahead.   

Mercedes has done well in the past three years here holding on to the top position. What has worked for you?

There are some major components. You have to have the right products. If you take the new E-Class, we launched it last year and it was the best-selling model in 2017 with over 60 per cent growth in sales year-on-year. This is absolutely encouraging. Besides products, you have to have dealers with the right mindset. You have to have dealers who are living the brand promise. I think this works pretty well here in India. We are investing in customer relation; we have the 'digital drive' in service. These ingredients – product, right brand positioning, right dealers, and the right team in our organisation – are behind Mercedes-Benz's success here. 

  

Where does India figure in Mercedes' list of priorities?

India is a very important market for us and you see this in our Mercedes-Benz setup here. We have a strong footprint in production and we are continuously expanding our portfolio of 'Made in India' products. We truly believe in India's potential and, if you see our growth in the past years, we've doubled our sales figures. Further, for the third time in a row, we are the No 1 luxury brand in India in terms of sales.

At present, India's contribution to your global sales in terms of volume would be somewhere in the single digit. Do you think it's possible to get to double digits? 

Our task at Mercedes is to have the right setup in India. Of course, it's the customers who make the decision. However, we will grow if we execute our footprint and our approach with the Indian customers correctly. Look at the way India took over in the past five years; our sales figures here doubled. We grew by 16 per cent last year. That is significant. It is moving in the right direction.

If you look at the last couple of years, there were some setbacks for the luxury segment. There was a diesel ban in the capital region, review of GST cess and increase in customs duty for imported vehicles recently. Sitting at the headquarters, how do you see these kinds of developments? Do you think it is normal?

It's not up to us to judge whether this is normal. We are globally working in nearly all the countries and every market is different. We have to manage our business within the market circumstances. Therefore, when there are changes in regulations, changes in tax and customs, we have to understand the impact on our business and we have to manage this.  

But doesn't that make it tough to plan the business? 

If you're a company working on a global scale, you will face different challenges in different markets every year. Would it be easier for everybody in the world if there would be no challenges? Yes, absolutely. But it's very normal to face situations changing in the markets. I think the question for a company is how fast and quickly can it manage a new situation? Can it adapt? Can it reorganise things that are necessary in order to compete in the market? It is all about the speed of accommodating changes.  

Going forward, will the company commit more resources in India?

We have different footprints here. We have a huge footprint in research & development and sales & marketing. Further, we have production lines not only for passenger cars but also for trucks. Wherever there is a chance, mainly in sales & marketing, we will invest when we see that the market is growing. 

India is now talking about electric mobility and there is a push from the government. Some companies have started talking about their plans. How will Mercedes approach this? 

We are prepared. We have plug-in hybrids with increasing range and we have full-electric vehicles. By 2025, we foresee – depending on the region, the infrastructure and, of course, the customer's preferences – that between 15 to 25 per cent of our total Mercedes-Benz sales will be purely electric. What does this mean for India? The first question is, what is the market's requirement and what does the customer want to get as a product. We are conducting the product investigation. We have to keep in mind that in order to move customers into electric mobility, whether it is plug-in or a fully-electric car, it depends on the infrastructure. These are two things that need to go together. One is the customer, who wants to have electric cars. The second thing is that the infrastructure has to be up and running.     

Do you think your company's Indian R&D setup will be capable of contributing to your global product development in any significant manner?

Yes, they are doing that already. Research and development is a global network. India is a very important part of the overall research and development network today and tomorrow. Bengaluru is the largest Daimler Research and Development Center outside Germany and contributes to various engineering and information technology domains.