Mercedes-Benz MD & CEO Martin Schwenk in an interview tells The New Indian Express that despite supply-side challenges brought on by chip shortages the year ahead is expected to be one of the best ever for luxury cars.
Edited excerpts:
Where do you see luxury car sales heading this year?
Going by our Q1,2022, sales performance, 2022 should be one of our best years ever in terms of volumes, as we expect exponential growth this year. We have a robust order bank of 5000+ cars currently, which we are striving to deliver to customers. The new C-Class already has received more than 1,000 confirmed bookings even before its debut. However, the industry still may not breach the 2018 volumes, but we expect all the players to grow their volumes this year.
Has the overall chip shortage stabilised?
The chip shortage continues and we also have ship shortage, which multiplies the existing supply-side challenges.We do not see these challenges easing out anytime sooner, and it will impact deliveries in remaining quarters as well.
What’s the trend line you see for Mercedes in terms of demographics, especially for first-time buyers?
Our customers are getting younger and this is evident from their reducing average age bracket. For instance the average age of the newly launched C-Class customer is about 35 years, which is significantly less than what it used to be even a decade back. There is an increasing trend of second-generation entrepreneurs and young professionals opting for a luxury marquee like Mercedes-Benz. We also see our top-end Vehicle segment growing at a much faster rate than our entry-level luxury models and this trend is not limited to major metros like Delhi, Mumbai or Bengaluru; but seen across most emerging markets.
Give us a sense of the challenges that are there - delivery delays etc... When do you expect them to normalise?
Current challenges are more in the supply side and not in the demand side. The chip and ship shortage will continue to pose pressure on the supply and delivery side, which already is impacted by the pandemic and we do not foresee the situation easing in the coming months.
You have maintained a leadership streak for the last 7 years - is that because of your deep m0
odel range - and is there a risk that may shift when other OEM product cycles reset and launch?
Customers’ continuous preference for Mercedes-Benz brand and products is an outcome of multiple factors, including the customer experience our franchise partners provide, our wide network that enables us to reach where the customers are, a convenient ownership experience and also very attractive financial packages that we offer with each product. In addition we have got the youngest and the most desirable product portfolio across segments, which creates aspiration, retains loyal customers and attracts customers from other brands. We have been offering connected car features like Mercedes me connect (Mmc) and that clearly differentiates our product offering in the market.
How is your retail for the future panning out so far?
With Retail of the Future (ROTF) we have created a transparent omni-channel experience for our customers, which has been a differentiator in the Indian auto industry. While the customers are appreciating the transparency and fairness, our franchise partners are not burdened with inventory pressures anymore. We have implemented a fundamental shift in the retail business model with our new direct-to-consumer (D2C) model and it has become a benchmark in the industry already.
The one new learning after the pandemic?
Every crisis offers a new opportunity. The pandemic accelerated digitisation of the auto industry from customer journey to shop-floor production processes. We were agile to benefit from this transformation and pass on the benefits of digitisation to our customers, by creating omni-channel experience.