Santosh Iyer, the first Indian to head Mercedes-Benz India as the chief executive and managing director in its 30-year history here, tells Benn Kochuveedan that people, mostly younger ones with double incomes, are happy to reward themselves with a luxury car today. As much as 90% of the cars sold here are core luxury (with a price tag of Rs 70 lakh-Rs 1.5 crore) and ultra-luxury (upwards of Rs 1.5 crore going up to Rs 11 crore.) In the past 30 years, the German luxe major has sold over 2 lakh units here, of which 1 lakh came in the last six years alone and almost 40% of them are under the watch of Iyer, who assumed office in January 2023. For the ultra-luxe Maybach, India is the 10th largest market for the Stuttgart auto giant selling over 500 units in 2024, taking the total number of Maybachs on our roads to over 1,500 since its entry a decade ago.
Selling 19,600 units in 2024, Merc controls over 40% of the volume share of the 51,000 units domestic luxury car market and over 50% when it comes to revenue share, thanks to focus on high-end models. Edited excerpts:
Is Mercedes moving towards an ultra-luxury brand now, going by the demand for the Maybach?
Absolutely. Mercedes-Benz is predominantly an ultra-luxury brand as 90% of our volume comes from what we call core luxury models that are priced above Rs 70 lakh and go up to Rs 1.5 crore and ultra luxury that are priced north of Rs 1.5 crore and go up to Rs 11 crore. That means only 10% of our volumes are entry-level models. Our cars are expensive because they have a lot of value and other brands follow our models today for their upgrades. Therefore, we focus more on the core luxury and the ultra-luxury segment. We don’t participate at all in the entry segment as hardly 10% of our sales are from that segment. We’ve already discontinued the B-Class and the only entry model we have now is the A-Class. But we have 10 models in the ultra-luxury space. Of the top-end models, as much as 35% are in the ultra-luxury space.
We sold more than 500 Maybachs last year, which command a price tag in the north of Rs 4 crore and there are 1,500 Maybachs on our roads since we started producing them in Pune from September 2015. India is among the top 10 markets for the Maybach now.
As much as 65% of our volumes come from the core luxury models. From a pricing point of view, our average selling price is Rs 95 lakh, which a few years ago was below Rs 50 lakh.
What is the average age of your customers?
Today, the average age of the customer is 38, down from 45 a couple of years ago. This clearly shows that more younger, successful people are rewarding themselves with luxury Mercs. This means that we have much more younger customers buying luxury cars and also today the demographic shift has happened. And 15% of our customers are women. It used to be just 7% during the pre-Covid period. A lot of double income families are able to easily afford a luxury car today and that’s what is driving the growth as well.
What can we expect from Mercedes and how the year ahead looks like?
The overall negative sentiment in the market is affecting sales. Having said that, we still get lots of inquiries, which are in fact higher than last year, but only the conversions are a bit slower. Luxury is a sentiment-driven purchase, when the capital markets are a bit under stress, sentiments becoming muted, you tend to postpone it, but otherwise in the long run or even for the full year, we surely see a very positive development. For the numbers part, we have lined up eight models for 2025 and have already rolled out four new cars this year—starting the year with the locally produced EQS 450, then the EQG, the G Wagon (both electric) and just last week introduced the SL Maybach priced at over Rs 4.2 crore.