Mercedes-Benz to expand in India's smaller cities as younger generations splurge

  • Mercedes-Benz posted record sales of more than 19,500 cars in India in 2024, registering a sales surge of 12 per cent.
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Mercedes-Benz posted record sales of more than 19,500 cars in India in 2024, registering a sales surge of 12 per cent.
Mercedes EQS SUV review
Mercedes-Benz posted record sales of more than 19,500 cars in India in 2024, registering a sales surge of 12 per cent.

Mercedes-Benz aims to expand its presence in the lower-tier cities across India. For this, the German luxury car giant plans to add 20 dealerships or service outlets in 2025, which will be mainly in smaller cities across the country. Also, these outlets will be set up in lower-tier cities with a target on the young business owners as the company's potential buyers. The auto company currently has 125 outlets in India, but the majority of those are concentrated in megacities such as New Delhi and Mumbai.

Mercedes-Benz posted record sales of more than 19,500 cars in India in 2024, registering a sales surge of 12 per cent. The company revealed that new car launches and a strong portfolio of electric models have helped the OEM to achieve this feat. Also, sales of electric vehicles have nearly doubled over the same period, revealed the automaker. The company plans to launch eight new car models, which will include EVs, in 2025 and expects to sell more cars than last year.

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The rapid economic growth in India has wrought a fundamental shift in attitude towards luxury purchases among its younger generations that differs from their elders who were more concerned with living thriftily and increasing their savings. "Now the second and third generations have taken over the family business and these guys have studied abroad, come back and are able to consume without guilt. It is not only cars, but even watches and other luxury," Santosh Iyer, CEO of Mercedes-Benz India, told Reuters.

He also said that demand for top-end Mercedes-Benz cars and electric models is higher than entry-level models in smaller towns like Kanpur in central India which has a population of about 30 lakh and Patna in the east with a population of over 20 lakh. In cities like these, Mercedes-Benz will expand with a service centre first, he added.

Iyer also noted that Mercedes-Benz has seen better momentum for electric car sales in some smaller cities as many of those customers typically live in stand-alone homes which have sufficient space to charge EVs unlike those living in condominiums in cities. Interestingly, major cities like Mumbai and Delhi currently contribute around 80 per cent of Mercedes-Benz's total sales.

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First Published Date: 12 Jan 2025, 10:29 AM IST
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