Mercedes-Benz has fingers crossed for 2017 after diesel ban, note ban of 2016
The country’s largest luxury carmaker sold 13,231 units in 2016, after record breaking 13,503 units in Lin2015. Now Mercedes Benz India boss hopes double-digit growth in 2017, when he expects the impact of demonetisation to fade away soon and the GST will accelerate sales.autos Updated: Feb 24, 2017 17:43 IST
Mercedes Benz India took hits in 2016, not once but twice. First it was the ban on heavy diesel vehicles in the Delhi-NCR at the start of the year, and then high-value notes got scrapped.
The country’s largest luxury carmaker sold 13,231 units in 2016, after record breaking 13,503 units in 2015. Now Mercedes Benz India boss hopes double-digit growth in 2017, when he expects the impact of demonetization to fade away and that GST will accelerate sales.
“Demonetisation and GST will be foundations of sustainable growth,” Roland S Folger, Mercedes-Benz India managing director and chief executive, had told HT in December.
“With the effects of re-monetisation gradually driving in, we are hopeful that we will be able to maintain our sales momentum. Despite grave challenges like demonetisation and diesel ban, we achieved significant sales last year,” Roland S Folger, Mercedes-Benz India managing director and chief executive said in a conversation with PTI on Thursday.
Folger had said, “2016 was a year of surprises, challenges and lost opportunities”, but had hopes pinned on 2017 for more growth.
Last year, the company had launched 13 models, one more than originally planned. The auto industry has seen an overall pickup in January sales, which drives the German giant to do better in 2017.
“We will continue our aggressive stance in terms of product launches and network expansion in 2017,” Folger said, but stopped short of telling the number of new Mercedes models coming to India this year.
Indian car industry has been riding on the SUV-wave for almost half-a-decade now, and Folger believes SUVs have some inherent advantages which are best suited for this market.
Mercedes’ SUV portfolio grew a robust 20% in 2016 and we see this trend continuing, he added.
He also said ‘SUVisation’ of the market will continue saying “we want to believe that it should remain in the trend, at least for now. Indians have shown their affinity towards SUVs, hence the belief becomes stronger.”
While the rates of the GST are still being debated by the Council, automakers are concerned too. The GST Council is expected to peg the tax rate on luxury cars at 28-40%. The present taxes are 30-32% for small cars and 48-54% on larger ones.
“If the luxury cars are charged at higher rates, then the presumption that GST will bring down prices will not be true in case of luxury cars, and hence the demand may not increase. Still I hope the new tax regime will help recover the momentum that the auto industry in general and luxury car industry in particular, lost in 2016,” he said.
But 2016 has made Mercedes-Benz anxious about 2017. “We have to wait and watch, hope for another surprise, for the GST to come in, as that will decide our future strategy.”
(With inputs from PTI)