Mercedes-Benz prepares to increase presence in smaller cities. Here's how

Mercedes-Benz is making an effort to increase its presence in smaller cities in India, where demand for premium vehicles is likely to rise significantly in the coming years. To meet the needs of its growing customer base, the company intends to expand its sales and service infrastructure in non-metropolitan areas.

Santosh Iyer, Managing Director & CEO, Mercedes-Benz India, told PTI,"We are clearly seeing that there is a lot of growth happening in mini metros in India and we are now increasing customer car parc in these cities."

To meet the needs of its consumers, the company is opening 20 new workshops in 10 additional locations, including Jammu, Kanpur, and Patna, he added. "We are very clear that in these mini metros, customers should not be driving a car for more than two hours to get the service done. So you want to go closer to these customer pockets," Iyer said.

He added that the penetration of luxury cars in such cities is lower than in metros, providing more potential for expansion. Mercedes' top metros currently account for approximately 70 per cent of its annual sales. "Rest 30 per cent comes from mini metros and other smaller markets," Iyer stated.

The luxury car market in India accounts for just over 1 per cent of the total passenger vehicle sales of around 40 lakh units annually. Iyer said for Mercedes-Benz in the eight large cities and metros, the penetration level is at 2.5 per cent but in the smaller cities and towns, it is at 0.4 per cent.

New launches

On Wednesday, the company launched the new GLA SUV, which is priced between ₹50.5 lakh and ₹56.9 lakh (ex-showroom). Meanwhile, the AMG GLE 53 4MATIC prices begin at ₹1.85 crore. It can be customised with over 7,000 combinations, with prices ranging up to ₹2.2 crore.

"The new GLA is a stepping stone into the SUV family while the new AMG GLE 53 Coupe receives further comfort enhancements and performance upgrades," Iyer said. The SUV sales accounted for 55 per cent of the company's total sales in 2023, he noted.

Iyer remarked that these new vehicles will increase the desirability of the SUV range. Mercedes-Benz India also presented the Concept EQG, emphasising its commitment to a fully electric future.

Concept EQG is a near-production version of the electrified G wagon which aligns with the company's sustainability objectives. The vehicle will make its debut later this year and is expected to be launched in India as well.