Mercedes Benz cautious ahead of 2019 as polls may affect sales, seasonality

Elections typically don't help consumer sentiments and Mercedes-Benz India is "cautiously optimistic" about sales prospects in 2019, when general elections will be held in the country, according to a senior company official.

The company, which reported a 12.4 per cent increase in its half-yearly sales in India at 8,061 units in the January-June period this year, is also looking at moderate sales growth in the third quarter of this year due to high base effect of last year.

"Elections are going to happen next year, typically that doesn't help sentiments at least prior to the elections. So it might lead to change in seasonality (sales) next year coming closer to the elections," Mercedes-Benz India Vice-President (Sales and Marketing) Michael Jopp told PTI.

When asked about the company's sales prospects in 2019, he said, "We are cautiously optimistic. It's just by looking at the past experience, last election years we have seen that there was some changes in the seasonality as well in terms of sales. It seems people tend to be bit cautious closer to the elections."

He, however, said the company's fundamental belief in the growth story in India and growth potential remained intact.

"It is our challenge and task to grow the (luxury) segment, which we have been doing for the last couple of years," Jopp added.

Last year, Mercedes-Benz maintained top position in the Indian luxury car market for a third year in a row with sales of 15,330 units, beating rivals BMW and Audi. It had sold 13,231 units in 2016.

So far this year, the company has introduced ten new products, which include new models and refreshes of existing models.

Asked if the company would change its new product programmes for India next year keeping in mind the upcoming elections, he said, "(On) product actions we will always be bullish and we will continue doing that.

"Ultimately the question is how is the customer sentiment and how they react? Do they postpone their decision to purchase or not.. but it is up to the customers."

Commenting on the impact of rupee depreciation against the dollar, Jopp said the company is keeping a close watch on it and it may go for a price hike of its products if the rupee continued to slide.

"We will try to hold it as long as possible but we have to take a call to revise prices again," he said.

On sales network expansion in India, he said, "We see future growth potential in tier 2 and tier 2 cities going forward and we are always evaluating cities where see additional potential and that typically will be in tier II and tier III cities."

At present, Mercedes-Benz India has a network of 95 outlets in 45 cities.

"In metros, we are obviously well covered," Jopp said adding the company's focus areas for future network expansion would be in the smaller cities and towns.