Mercedes-Benz witnessing strong festive demand, launches new SUV, AMG model
With an order backlog of 3,000 cars, the German luxury carmaker says it continues to witness supply chain constraints, particularly for 48V mild-hybrid system batteries.
Mercedes-Benz India, which registered an 11 percent year-on-year growth with total sales of 12,768 units in the January-September 2023 period, says it is witnessing a strong demand in the ongoing festive season that has spread over four months, starting in August 2023 with Onam.
The company is bullish about the current market sentiment and expects sustained demand for luxury vehicles on account of a thriving economy and wealth generation in the country. According to Santosh Iyer, Managing Director, Mercedes-Benz India, "We have seen good demand across the festivals of Onam, Navratri, and now Diwali, and the overall customer sentiment is quite positive with strong consumer demand across our models. This could be attributed to the strong corporate earnings, as well as the Indian economy doing quite well."
Bullish on this demand, the company today launched two new models to take its total new product introduction tally to 10 in CY2023, with the latest GLE SUV and Mercedes-AMG C 43 sedan joining the bandwagon. While the new Mercedes-Benz GLE comes priced in the range of Rs 96.4 lakh to Rs 1.15 crore, the performance sedan is priced at Rs 98 lakh, ex-showroom.
The company says that 55 percent of its total volumes come from SUVs, with the sedans contributing to the remaining 45 percent sales. The GLE, which was originally launched as the ML Class, has gone on to sell over 20,000 units in India, with the SUV contributing to an average 15 percent of Mercedes-Benz India's total annual sales.
"In 2012, India became the first country outside of the US to locally assemble the ML Class (now GLE) from CKD kits. The GLE contributes to 15 percent of our total annual sales," Iyer pointed out.
He, however, cautioned that the company continues to witness supply chain constraints, particularly with respect to the 48V mild-hybrid system batteries, which now go into almost all of its models as they are equipped with this efficiency-enhancement technology.
"We are unable to produce as many cars as we would like to, and therefore, many customers continue to wait to get the GLC, GLA, as well as the latest GLE SUV. The core of the issue is the shortage of the 48V battery system coming from Germany and is not in adequate supply," Iyer said.
The new GLE, which now comes with two diesel (2.0, 4-cylinder and 3.0, 6-cylinder) and one petrol engine (3.0, 6-cylinder) options, has been upgraded with a 48V mild-hybrid system to conform to the latest BS VI Phase-II emission standards in India and gets an integrated starter generator to offer additional power and torque boost when in need. The SUV also gets Mercedes' E-Active Body Control suspension system which is claimed to be one of the most sought-after comfort features in the luxury offering.
According to Lance Bennett, Vice President, Marketing and Sales, Mercedes-Benz India, "The GLE is the best-selling luxury SUV in India, and we have further enhanced it in the latest iteration. Our expectations, in terms of sales volumes, continue to grow with the new model, and we continue to offer both diesel and petrol choices to the customer."
Poised to grow amidst hurdles
While its order backlog has reduced from being pegged at around 3,500 cars earlier this year in May, to nearly 3,000 cars by end-October 2023, the German luxury carmaker has acknowledged the supply chain hurdle which would limit its delivery capabilities.
"We are seeing a hit in terms of the supply chain which will limit our ability to deliver all cars to customers over the next couple of months. However, we are aiming to achieve robust growth over last year," Bennett said.
The company, which has transitioned to a fully direct-to-customer retail model in India through its franchise partner outlets acting as experience centres, says its latest integrated 3S facilities are driving omni-channel retail with customers starting their purchase journey online and seamlessly transitioning to physically experiencing the products at its showrooms.
Bennett further added that there is a marked reduction in the average age of the Mercedes-Benz India customers as the wealth increases in the country's younger age groups. With its youthful and energetic appeal, the Mercedes-AMG brand is also witnessing strong demand in India.
The new Mercedes-AMG C 43 sedan comes powered by a 400hp, 2.0-litre gasoline engine with a 48V mild-hybrid system and a 0-100kph time of 4.6 seconds. The company says that this is the world's first series production engine with an electric exhaust gas turbocharger.
Mercedes-Benz India, which also has a three-model EV portfolio, including the EQB, EQE, and EQS models, says that it is witnessing younger buyers emerging as the change makers. "While it is a broad spectrum of customers, we are certainly witnessing more momentum in the EV space coming from the younger buyers. We continue to plan more EV models for India as we aim to achieve almost 25 percent of our total sales from EVs over the next four-five years," Bennett signed off.
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