Mercedes-Benz, the German luxury carmaker, envisions India becoming its third-largest market in the ‘Region Overseas’ within the next 2-3 years. A senior company executive expressed confidence in India’s potential for sustained demand for luxury products, emphasizing its strategic significance for the Mercedes Benz brand.

Region Overseas Overview

The ‘Region Overseas’ for Mercedes-Benz encompasses 118 countries, excluding North America, Europe, and China. Among these, India currently stands as the fifth-largest market, following Japan, South Korea, Australia, and Turkey. The sales gap between India and Turkey is approximately 8,000 units per year.

India’s Role in the Global Landscape

Sagree Sardien, Head of Region Overseas at Mercedes-Benz AG, highlighted India’s importance in the global context. She emphasized that India plays a crucial role not only at present but also in shaping the future trajectory of the Mercedes-Benz brand.

Target and Growth Prospects of Mercedes-Benz

Sardien expressed optimism about reaching the market objective, affirming, “Given the current trajectory of the Indian Automotive market, we anticipate accomplishing this within the next two to three years.” India is recognized as a strategic market for Mercedes-Benz, witnessing double-digit growth in sales of high-end models in recent years, a trend expected to continue.

Product Expansion and Market Penetration

Mercedes-Benz intents to introduce 12 new models in the Indian market this year, comprising three battery electric vehicles. The company also aims to tap into smaller cities, intending to establish sales outlets in 10 new locations, ranging from Jammu to Kottayam, to expand its operations.

Electrification Journey in India

While the electrification journey in India is gradually gaining momentum for Mercedes-Benz, Sardien acknowledged that only 4% of total sales in the country currently come from electric vehicles (EVs). She anticipates double-digit growth in electrification within the Indian market, aligning with the company’s commitment to an electric future.

Customer Preferences and Strategic Direction

Despite the slower-than-expected pace of customers’ transition to electric vehicles, Sardien emphasized Mercedes-Benz’s commitment to its strategic direction. The company acknowledges the future is electric but remains flexible to accommodate evolving customer preferences and market conditions.

Outlook on the Luxury Car Market in India

Sardien speculated that the overall luxury car market in India could potentially reach the 1 lakh unit mark by the end of this decade. However, she highlighted the need for fundamental changes in the market. Especially, the critical role of customer transitions between combustion engine and battery electric vehicle architectures.

Market Statistics

As of now, the luxury car market in India comprises around 47,000 units per annum. That remains a small segment within the overall passenger vehicle market. Which surpassed the 41 lakh units mark last year.