Expect India to be in our top 3 markets in 3 years, says Mercedes-Benz

The luxury car market in India could exceed 100,000 annual sales by 2030, says Region Overseas Head Sagree Sardien

Mercedes-Benz is optimistic about India becoming one of its top three overseas markets within the next three years as the demand for luxury cars continues to rise in the country, according to Sagree Sardien, its head of region overseas.

India currently holds the fifth position among the German carmaker’s overseas markets, behind Japan, South Korea, Australia, and Türkiye.

Sardien also highlighted the potential for the luxury car market in India to surpass the annual sales mark of 100,000 units by 2030, provided the right products are launched based on customer preferences. Last year, approximately 47,000 luxury cars were sold in India.

“We see the potential for the luxury segment. We have been recording double-digit growth year-on-year (Y-o-Y). I think this trend will continue in 2024 and beyond. The potential for India and what we can bring to the market here is limitless. Of course, you need to have a lot of resilience and strategic patience,” she said during a media round table.

The German carmaker, leading the luxury car market in the country, achieved a 10 per cent Y-o-Y growth to 17,408 units in 2023. In 2022, the company recorded a 41 per cent Y-o-Y growth to 15,822 units.

“I hope to see India in the top three at least of our overseas markets... At the moment, it is purely an aspiration for us, but we are convinced with the way the Indian market is developing, you should see this in the next two or three years,” she said.

This is an aspirational figure as other overseas markets could also explode in volume sales, she added.

The Centre is reportedly close to approving a policy to extend concessions on import duties for electric cars priced above Rs 30 lakh for two to three years, potentially paving the way for Tesla’s entry into the Indian market. This relief is expected to be provided against bank guarantees by the US-based carmaker for investments in building an electric vehicle (EV) factory in India.

When asked about Tesla and its tax-related discussions, Sardien replied that Mercedes-Benz fully embraces the entry of any new competition into the Indian market.

“We honestly believe that from the Indian government’s perspective, we have also received great support over the years for the set-up of our plant or facilities, and everything else. And we believe that we can still operate quite competitively within the current regulations... that are there. So, therefore, we are not concerned about the entrance of new competitors into the market itself. And if anything, I think this will be great for the Indian automotive industry,” she explained.

She said that the government regulations have not inhibited customers from buying luxury cars.

“It (India) is not the only market with rigorous policies or regulations. There are markets that are much more intense, and we operate within them and have gained the experience and momentum on how to handle this within the respective markets, and to make the most for our customers. I do not believe it’s an inhibiting factor,” she noted.

“I’m strongly encouraged to see the amount of attention that you give to the automotive industry and also to the battery EV transformation within India,” she said.

So far, the German carmaker has launched just three electric cars in India. In 2024, the company plans to launch three more electric cars, including its top-range product Maybach EQS.

“Customer preferences (regarding electric cars) are changing, albeit at a much slower pace. We would go along with the transformation of our customers. We do not change our strategic direction. It is clear that the future is electric, but we ensure that we cater to our customers’ changing preferences,” she noted.

“What we see in the Indian market is actually no different from what we see worldwide. Is it (EVs) obviously growing at a pace that everybody in the automotive industry would have liked? Certainly not. We have to give our customers the time to do this,” she added.