High demand in luxury car market will sustain: Mercedes India CEO Schwenk

We think these new products drove in customer confidence into the brand and our customers appreciated this momentum, said Schwenk

For Martin Schwenk, the head of the Indian unit of iconic German automaker Mercedes Benz, 2020 was a year of learning. While, there has been massive pressure on the automaker’s performance because of the lockdown and low consumer sentiment, Schwenk says thing have improved drastically since September and he is confident about launching 15 new models in 2021, the highest in a year for the firm. Edited excerpts:

What gives you the confidence to launch 15 models when consumer spending has taken a hit?

We have seen a strong recovery in sales since September, with growth every month, and it has reached the pre-Covid level. We had a good festive season despite the pandemic-induced challenges. Our sales were at last year’s levels.

We think these new products drove in customer confidence into the brand and our customers appreciated this momentum. New product introductions create customer excitement and drive positive momentum. We launched 10 new products including some segment leading cars like the GLE and GLS SUVs. In addition, we introduced a wide range of AMG performance cars.

Is there a segment of the market that you will be eyeing with these launches?

This year, we will focus on sedans. We have a strong presence in the SUV market. We now want to grow the Sedan segment so that we have a strong portfolio on both sides.

While the new products slated for this year will include facelift models, there will be a substantial number of new models, too, including cars that will be brought to India for the first time. Starting Q2, the all-new A-Class Limousine, the new GLA, AMG GT Black Series are some products lined up for a 2021 debut.

There is a trend of customers going for cheaper models. Do you see this happening with your customers as well?

No, not at all. We haven’t seen this in case of our customers. On the contrary, we find that customers are ready to splurge more on a luxury car because there has been little discretionary spending on things like travel the previous year.

Taxation has been a bone of contention for the industry, more so for luxury carmakers. Has this hit your volumes?

High taxation is a big deterrent to demand in the sector. Already the auto industry is highly taxed... from the import duties to goods and services tax (GST) and cess, which is 22 per cent (on luxury cars). I think the target should actually be to support the growth of the sector and reduce tax. We should try and find an avenue because at the end of the day if taxation is hitting volumes and ultimately consumers are buying less, then no one wins, everyone loses.

Will Mercedes join the electric vehicles trend in India?

We have seen a very good response to the EQC — it has created a lot of customer interest. The EQC was also meant for us to see how we can develop the EV segment here, what the market reaction is, and also how the framework is developing. We still believe there is some activity necessary in terms of infrastructure and so forth. But overall, I think we will continue on our path and we will assess, based on our EQC experience, how we can take our strategy forward.