Dhiram Shah

Martin Schwenk, Mercedes-Benz India’s new CEO and Managing Director, discusses the India launch of high-performance AMG cars; the mean machines, he says, that will redefine India’s driving experience.

The Indian luxury car market has steadily grown over the past
decade, making it one of the most lucrative markets for high end car manufacturers. Mercedes-Benz India has been on top of the game for almost four years now. According to a report by Forbes India, Mercedes-Benz India made sales history, in 2017, by crossing the annual sales figure of 15,000 cars. In the first half of 2018, the company achieved 12 per cent growth, selling 8,061 units, leading the market followed by BMW, Audi, Jaguar Land Rover and Volvo.

Mercedes-Benz India has a new leader. Martin Schwenk, the new Managing Director and CEO of India operations, took over from Roland Folger in November last year. After having settled down in the new position, Schwenk spoke to LuxeBook about the German automaker’s India road map, the predicted impending growth slowdown, electric cars, regulatory and taxation challenges and low penetration of luxury cars in India.

Schwenk took over the reins during a challenging time; the four top highend car manufacturers had witnessed a sharp decline in sales in the second half of 2018. “Auto manufacturers faced strong macro-economic head winds in H2 (half second), affecting the consumer sentiment, which posed significant sales challenges,” says Schwenk. “The luxury segment in India did not really grown in 2018. However, Mercedes-Benz India had the highest sales volume in history.” The German automaker, which began its journey in India 24 years ago, reached the cumulative production of one lakh cars in the country, achieving a significant milestone.

Mercedes-Benz Phase 2 local assembly plant
Mercedes-Benz Phase 2 local assembly plant

However, 2019 is slated to be a more challenging year for the automobile industry, thanks to the general elections and economic slowdown. “While we cannot predict any precise growth rate for 2019 at this juncture, we believe that the long-term trend is still unbroken and we will see considerable growth in the luxury car segment,” says Schwenk. He predicts that the demand is likely to pick up, driven mainly by pre-purchases of the BS-IV vehicles, before the BS VI, a more environment-friendly norm, is introduced in April 2020.

Last year, the Transport Ministry of India introduced some changes to the homologation roles and import regulations, which let automobile manufacturers import foreignmade vehicles irrespective of their price and engine capacity. Each manufacturer can import up to 2,500 cars, which comply with internationally accepted standards, without getting it homologated in India.

“We welcome the government’s decision on the liberalised import norms. It reduced the costs involved in homologation, and enabled us to deliver our products faster. It also allows us to test new formats and technologies and garner customers’ expectations from us.”
– martin schwenk
ceo & managing director, mercedes-benz india

Schwenk, however, thinks that steep rates on imported cars are still a big roadblock. “We believe that reduction in import duties will not only allow the luxury automotive sector to grow – resulting in a multiplier effect – it will also help us introduce newer technologies and models, which are technologically advanced and safer.”

The entire car industry is currently transforming. The focus is on electrification, autonomy, and ride-hailing. While in the international markets Mercedes Benz has shown a willingness to lead the electric car market by launching a new EQ sub-brand last September, the German automaker didn’t discuss its plans for the Indian market until recently. “The launch of an electric vehicle would not be considered just another launch for Mercedes-Benz India. We will have to take into consideration a host of factors including infrastructure readiness and customer acceptance,” says Schwenk. The company has an overarching CASE (Connected, Autonomous, Shared, Services and Electric strategy) policy that governs mobility and needs. Under CASE, the company has been closely following the trends and developments and evaluating the prospects of launching commercially sustainable EVs, which are also preferred by customers.

Mercedes-Benz concept EQ electric-Mobility
Mercedes-Benz concept EQ electric-Mobility

“Like with all important markets, India too is getting ready for the next wave of the automotive revolution, which tilts towards a zero-emission regime. It is a work in progress, and it’s too early to say how things will unfold,” says Schwenk, who has been roped in to head the operations in India where luxury car market penetration is a meagre 1.5 per cent as opposed to his previous work country, China, where the rate is an impressive 13 per cent.

For Schwenk, however, the small number in India means huge
potential for growth. China is Mercedes-Benz’s biggest market with 11 per cent year-on-year growth. From January to December 2018, the company sold 6,53,000 units. India, on the other hand, is an emerging market with immense potential. “There is no comparison between these two markets as both countries have their own independent growth strategies,” says Schwenk. That said, India and China have many similarities such as rapid
growth, a “can-do” attitude, high level of aspiration and luxury-seeking customers. “I would like to build on the good work
done by my predecessors and ensure that we remain the preferred brand for customers and continue to define India’s luxury car market.”

Talking about the brand’s strategy for AMG, it is high-performance
cars, in India, Schwenk says that the luxury car market here is at par with the rest of the world when it comes to customer knowledge, awareness and expectations. “An increasing penchant for AMG performance cars has been witnessed in India. Hence, there will be an array of exciting AMG products that will make their India debut in 2019, redefining the ‘driving performance’ for
AMG (Aufrecht Melcher Grossaspach) car enthusiasts.”

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