Mercedes Benz sees sales rising 50% in H1 as second Covid-19 wave recedes

Mercedes Benz India expects its sales to go up by 50 per cent in the first half of this calendar year, on the back of a healthy first quarter and clear signs of recovery in bookings and showroom footfalls in June. The German luxury car maker expects boo­kings to pick up even more in the coming months. 
 
Like all car makers, Mercedes Benz also witnessed a disruption in sales and production owing to the second wave of the Covid-19 pandemic hitting the country in April and May this year.  
 
Launching an all new S–series in Delhi today, Martin Schwenk, managing director and CEO, Mercedes Benz India, said that the recovery trends were based on the lockdown being lifted in the west, north and the east and that, hopefully, the recovery would be more pronounced when the southern India market also opened up. However, he conceded that sales were substantially down in April and May.

 

“Our dipstick study shows that bookings in June are recovering and are around 80 per cent of that in March, and footfalls have hit 50-60 per cent in the same period. Also, we have some pending bookings for which delivery is being made. We are halfway through in our target to launch 15 new models or upgrades, and will continue to launch new ones which help in creating excitement in the market,” he said.
 
According to the CEO, last year the company saw a V-shaped recovery after the first lockdown was lifted and showrooms opened and production started once again. He expects the same to happen this year as well, now that the second wave of the pande­mic is ebb­ing and restrictions are being eased.

 
However, Schwenk is of the view that the company may not get back to its record 2018 volumes for another two years. In 2019 the company sold over 13,786 cars, but volumes dropped to 7893 cars in 2020 — a fall of over 42.7 per cent. In 2018 the car maker sold over 15,538 units in India.
 
On the government’s big push towards exports by auto component companies and automakers through the production-linked incentive scheme, Schwenk said that while Mercedes Benz was investing Rs 400 crore for the localisation of its models, the domestic volumes were too small for export. “The policy is good, but you need a substantial size of the domestic market before it is viable to export from the country. India’s domestic market is still very small, because of high taxation,” he said.

 
Pointing out that the company was already assembling 95 per cent of the cars sold in India, the localisation, he said, mainly consists of assembly lines, welding and paint shops. The company was not setting up a press shop, as it does not yet have enough scale, Schwenk said.