By Mercedes-Benz, the German automotive giant, foresees India emerging as its third-largest market within its ‘Region Overseas’ in the next 2-3 years, buoyed by sustained demand for luxury vehicles. The ‘Region Overseas’ encompasses 118 countries, excluding North America, Europe, and China.
Market Position and Growth Trajectory
Currently, India ranks as the fifth largest market in the Region Overseas, trailing behind Japan, South Korea, Australia, and Turkey. However, with a sales gap of approximately 8,000 units per year between India and Turkey, the country holds significant growth potential for Mercedes-Benz.
Strategic Importance and Expansion Plans
Sagree Sardien, Head of Region Overseas at Mercedes-Benz AG, emphasizes India’s strategic significance for the brand’s future. She anticipates India’s ascension to the third position within the next few years, driven by robust sales of high-end models. To bolster operations, Mercedes-Benz plans to introduce 12 new models, including three battery electric vehicles, and expand its presence in smaller cities across the country.
Electrification Journey and Customer Preferences
While the electrification journey in India is gradually gaining momentum, with electric vehicles (EVs) accounting for 4 percent of total sales, Sardien expects double-digit growth in electrification within the market. However, she acknowledges that customer preferences are evolving at a slower pace than anticipated, necessitating alignment with the evolving market dynamics.
Future Outlook and Market Potential
Looking ahead, Sardien envisions the luxury car market in India reaching the 1 lakh unit mark by the end of the decade, contingent upon several market dynamics and customer transitions from traditional combustion engines to electric vehicles. Despite its current size of around 47,000 units annually, the luxury car segment represents a fraction of the overall passenger vehicle market, which surpassed 41 lakh units in sales last year.
Conclusion
Mercedes-Benz’s optimistic outlook underscores India’s growing significance as a key market for luxury vehicles. With strategic expansion plans, a focus on electrification, and a keen eye on evolving customer preferences, Mercedes-Benz aims to leverage India’s potential as a prominent player in the global automotive landscape.
