 "We are the fastest-growing luxury brand: Eberhard Kern")
Mercedes-Benz regained the top slot in the Indian luxury car market early this year and India is now one of the top-20 markets for the German car maker. Eberhard Kern, managing director and chief executive officer of Mercedes-Benz India, tells Ajay Modi that he is confident of maintaining the Numero Uno position. Excerpts:
Where does India stand in the global operations of Mercedes-Benz?
We made it to the top 20 countries last month. Sales grew 40 per cent in January-March quarter and further by 49 per cent last month. Considering Mercedes-Benz products sell in over 170 countries, being in top-20 is significant.
What is the localisation achieved by Mercedes-Benz in India? Is there an effort to take it further?
On average, there is 50 per cent localisation. In C, E and S-Class models, we have been able to take it to 60 per cent. Taking it beyond 60 per cent is only possible if you have high volumes.I need at least a single-model volume of 60,000 a year to consider that. We sold 10,200 units last year through a mix of models. I see negligible scope to take localisation further.
While the companys sales are growing rapidly, it is sitting on spare capacity. How do you plan to use it?
We have recently doubled to 20,000 units a year. We did not install capacity to use it tomorrow. We have to be future ready. Whenever demand develops, we should be able to act quickly. Therefore, it is sufficient capacity for near future.
Will you look at exporting from India, considering there is spare capacity?
In our set up, exports make sense if we have a full-fledged production line. A knocked-down production line in itself is expensive. It makes no sense to pick up parts from the mother plant in Germany, bring to India and assemble to export. The logistics cost will be high.
You are now the leader in luxury car market. Are you confident of retaining this position?
We had the monopoly in the Indian luxury car business for years. We lost a bit of ground when competitors came in. We found ourselves at the third spot three years back. We upgraded our strategy and, now, we are the fastest-growing luxury brand. History gave us some learning. We have a customer base of 70,000 in India and a strong product portfolio that is expanding. There are strong fundamentals that give me the confidence that we will stay ahead.
Where does India stand in the global operations of Mercedes-Benz?
We made it to the top 20 countries last month. Sales grew 40 per cent in January-March quarter and further by 49 per cent last month. Considering Mercedes-Benz products sell in over 170 countries, being in top-20 is significant.
What is the localisation achieved by Mercedes-Benz in India? Is there an effort to take it further?
On average, there is 50 per cent localisation. In C, E and S-Class models, we have been able to take it to 60 per cent. Taking it beyond 60 per cent is only possible if you have high volumes.I need at least a single-model volume of 60,000 a year to consider that. We sold 10,200 units last year through a mix of models. I see negligible scope to take localisation further.
While the companys sales are growing rapidly, it is sitting on spare capacity. How do you plan to use it?
We have recently doubled to 20,000 units a year. We did not install capacity to use it tomorrow. We have to be future ready. Whenever demand develops, we should be able to act quickly. Therefore, it is sufficient capacity for near future.
Will you look at exporting from India, considering there is spare capacity?
In our set up, exports make sense if we have a full-fledged production line. A knocked-down production line in itself is expensive. It makes no sense to pick up parts from the mother plant in Germany, bring to India and assemble to export. The logistics cost will be high.
You are now the leader in luxury car market. Are you confident of retaining this position?
We had the monopoly in the Indian luxury car business for years. We lost a bit of ground when competitors came in. We found ourselves at the third spot three years back. We upgraded our strategy and, now, we are the fastest-growing luxury brand. History gave us some learning. We have a customer base of 70,000 in India and a strong product portfolio that is expanding. There are strong fundamentals that give me the confidence that we will stay ahead.