No immediate plan to increase prices: Mercedes-Benz India

Things have been going well for Mercedes-Benz of late in India following the launch of some new models. The company has been doing well in the last few months. Martin Schwenk, MD & CEO, Mercedes-Benz India, details the company’s plans to Vivek Phadnis of DH. Excerpts:

How is it going for Mercedes-Benz of late?

Overall, we are doing well at the moment. The pandemic was very hard, and every city was hit massively in April-May this year. We have had a V-shaped recovery as a brand. From June, July and August, we have seen sales numbers equal to the pre-pandemic situation. So, overall, we have seen sales recovery. Most markets are performing very strong, and we are hopeful about the next couple of months.

What bothers everyone a little bit is a supply constraint. While we do not want to reduce production, we have had some delays in production, where you have to wait a couple of weeks or even two to three months if you want to get SUVs, for example. That is due to global supply constraints. But overall, from the business perspective, we are very confident and happy about how the last couple of months have developed.

Some companies have been struggling with the price rise of commodities. Has it affected Mercedes-Benz?

Yes, we have had price increases. It is not possible with the margins we are having. We have not passed on everything to customers. We have to see how things develop further.

For example, freight cost is also an issue. A lot of our suppliers are from Europe. The weakening of the Rupee against the Euro is a disadvantage, which we tried to offset to some extent. But it remains a topic we are watching at the moment. We have no immediate price increase planned. I hope we can keep the prices stable for some time. It is a concern.

Could you outline your new product strategy?

This year, we have had a substantial refresh of our products. We have had the GLA, the new E Class, the S Class CBU version. The first big step will be the S Class, but in the mid-term, we see a lot of movement on the global scale with electric vehicles. So, we will also see which electric vehicle we will bring to India. We still have to decide whether we will import or do local production. But that is one of the steps to come.

What are your electric vehicle plans for India?

We are taking a step-by-step approach in India. In January 2020, we launched the brand EQ, and under that, we said we would bring electric vehicles. Around one year ago, we brought in the EQC in six metro cities but did not make it available in the entire network.

The next step we are doing is to expand the network. We will sell and service the EQC through our dealerships in India. We are trying to develop the market now. We are trying to see which of our other vehicles fit into the Indian market. We have not decided yet, but I am confident we will do something in the future. It is a step-by-step approach. Brand, first car, network, increase. That is the rough plan.

What are your expectations about the upcoming festive season?

I am very optimistic. We have seen in the last couple of weeks that the demand situation is similar to a pre-pandemic. I think we have all adjusted and moved on with our life to some extent. That means we see people coming into the showrooms, purchasing cars and celebrating again as much as possible. I am optimistic. Will we have other waves? Who knows? We have to take it step by step. We have seen the economy and businesses are resilient.