Mercedes-Benz India betting big on nouveau riche to drive sales of luxury cars
Luxury carmaker Mercedes-Benz is betting big on the young new millionaires in the country to drive the demand for luxury cars here, and creating faster sales growth than for mass market cars, a top company official told Reuters. Mercedes is currently the top-selling luxury car brand in the country, with a market share of more than 40%, as per auto market data provider JATO Dynamics.
The country's increasing numbers of nouveau riche include young entrepreneurs or high-earning professionals who appreciate the luxury element and technology of the cars, Martin Schwenk, CEO at Mercedes-Benz India, said. "The base is getting broader and gradually moving beyond our traditional customers," he said in an interview.
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Schwenk added that the average age of the buyers of premium vehicles from the brand has also fallen below 40, from more than 45 earlier. "Going forward, we will see higher growth rates in the luxury segment than we see in the mass market," he added.
Mercedes-Benz India's sales rose more than 40% to 11,242 cars in 2021, though it came off a low of 7,893 units during the pandemic-hit year of 2020. However, the carmaker saw a growth of 80% in top-end models such as the GLS, S-Class and GLS Maybach, all of which cost more than 10 million rupees To capitalise on the momentum, the company plans to launch 10 models this year, including its locally assembled electric EQS sedan.
Speaking about the shortage of semiconductors and logistics woes worsened by Russia's invasion of Ukraine, Schwenk said this has led to an order backlog of 4,000 cars and waiting times of more than six months in some cases. “We have very good sales momentum, the concerns are on the supply side. You have congestion at the ports that cause really significant delays," he said.