Germany’s Mercedes-Benz is betting {that a} rising crop of younger new millionaires will drive demand for luxurious automobiles in India, rising gross sales at a tempo sooner than that of mass-market automobiles, a prime firm official mentioned. India’s growing numbers of “dollar millionaires” embody younger entrepreneurs or high-earning professionals who admire the posh ingredient and expertise of the automobiles, mentioned Martin Schwenk, chief government of Mercedes-Benz India.
“The base is getting broader and gradually moving beyond our traditional customers,” Schwenk instructed Reuters in a current interview within the western industrial metropolis of Pune, house to Mercedes’ India headquarters and manufacturing plant.” Going ahead we’ll see greater development charges within the luxurious section than we see within the mass market,” he mentioned, including that consumers’ common age had additionally fallen under 40, from greater than 45 earlier. Global carmakers’ largest development hurdle, nonetheless, is a scarcity of semiconductors and logistics woes worsened by Russia’s invasion of Ukraine.
For Mercedes India, this has led to an order backlog of 4,000 automobiles, Schwenk mentioned. India’s start-up frenzy and inventory market growth are creating a brand new breed of rich splurges on luxurious manufacturers corresponding to Rolex, Louis Vuitton, and Gucci, the 2021 Hurun India Wealth Report confirmed. The variety of Indian households with a internet value of at the least one million {dollars} grew 11% in 2021 to 458,000 and is anticipated to extend by 30% over the subsequent 5 years, the report mentioned. India is basically a small and low-cost automobile market during which luxurious fashions account for simply over 1% of whole annual gross sales of about 3 million.
Mercedes is the top-selling luxurious model, with a market share of greater than 40%, says auto market knowledge supplier JATO Dynamics, and it competes with Audi, BMW, and Tata Motors’ Jaguar Land Rover. Its India gross sales rose greater than 40% to 11,242 automobiles in 2021, coming off a low of seven,893 in the course of the pandemic-hit 12 months of 2020. But Mercedes noticed development of 80% in top-end fashions such because the GLS, S-Class, and GLS Maybach, all automobiles costing greater than 10 million rupees ($131,337). Schwenk mentioned whereas the pandemic had pushed a few of this demand, as extra folks “spent for their own pleasure”, India’s luxurious automobile market confirmed potential for greater development, a characteristic lacking during the last six to eight years. To capitalize on the momentum, the corporate plans to launch 10 fashions in 2022, together with its domestically assembled electrical sedan EQS.
While development in India’s luxurious and mass markets are usually not instantly comparable, Mercedes’ high-end fashions doing properly displays the wealth of the nation, mentioned Ravi Bhatia, president for India at JATO.”The wealthy have turn out to be richer and a few of them have ended up upgrading their way of life,” Bhatia mentioned.JATO’s evaluation additionally confirmed that Mercedes’ product combine and pricing led to a decrease common weighted value of its automobiles, placing upgrades to the posh section inside attain of extra clients, he added.
Mercedes’ gross sales in 2021, nonetheless, are nonetheless decrease than its peak of greater than 15,500 automobiles in 2018. Schwenk mentioned gross sales might method 2018 ranges this 12 months if there have been no additional provide chain disruptions due to COVID or geopolitical points. Lowering Indian taxes on luxurious automobiles, which he mentioned have been among the many highest on the earth, would additionally assist develop the section and profit the automobile market. (Reporting by Aditi Shah; Editing by Clarence Fernandez)
Source: www.financialexpress.com”