No other luxury automobile company has been as active as Mercedes-Benz India in 2020. On December 13, the German brand hosted a car rally of 46 old and iconic Mercs in Mumbai, flagged off by Maharashtra’s home minister Anil Deshmukh. The event also felicitated Maharashtra’s women Covid-19 warriors.
About a month ago, the luxury car brand entered into a retail marketing tie-up with State Bank of India (SBI) to access the latter’s HNI customer base for selling its premium cars.
And through the year Mercedes-Benz India launched 10 new cars in India.
The business plan was to keep the momentum going and to stay connected with customers, says Martin Schwenk, MD & CEO of Mercedes-Benz India.
Q. Why did Mercedes-Benz India launch so many new products this year?
New product introductions create customer excitement and drive positive momentum. We launched 10 new products including some of the segment leading cars like the GLE and GLS SUVs. In addition, we introduced a wide range of AMG performance cars including the AMG C63, AMG GT 4-Door Coupe, AMG GT R, the stylish SUV coupes like the AMG GLE 53 and the first ‘Made in India’ AMG, the AMG GLC 43. There were some delays due to the pandemic, but we ensured our customers have new products to choose from from our global portfolio. We also underlined our transition into e-mobility with the launch of India’s first ‘Luxury EV'—the EQC.
We think these new products drove in customer confidence into the brand and our customers appreciated this momentum. We have seen a strong recovery of our sales since Q3, which grew sequentially each month, and our sales recovery is at a pre-Covid level currently. We had a good festive season this year despite the pandemic-induced challenges. Our sales were at last year’s levels.
Q. How would you evaluate 2020 for your business?
The year 2020 presented the toughest business environment anyone will ever go through, but it also taught us many lessons, both at the personal and business levels. I would say the resilience of the people and the competitiveness of businesses were tested.
For us, at Mercedes-Benz, the crisis opened newer avenues to explore and create an online ecosystem around the brand, the products, the services and even at our shops. While we expect the annual sales volume to stay below that of last year’s due to the loss of sales in the March-May period (in the lockdown), we are satisfied with the rapid pace at which the online sales channels and the e-commerce business have grown. Remarkably, up to 15-20 percent of our current sales is contributed by various omnichannels and this is a very encouraging trend. We also deepened our market commitment and invested an additional Rs 400 crore in our production facility and addition of new products. I would say the pandemic gave us ample time to rethink, reprioritise and re-strategise our businesses. The ensuing lockdown gave us scope to make the transition towards a technology-driven, sustainable brand, which is competitive and future-ready.
Q. What were the biggest challenges and achievements at Mercedes India this year?
The challenges were far too many as the pandemic completely derailed the auto industry with zero sales in April and a loss of a quarter of sales. In addition, Covid-19 is a global health crisis and securing the health and safety of our people and our customers was our utmost priority.
It was also imperative for us to take firm measures to recover the financial health of the company and our partners like the dealers, during the ongoing pandemic.
Nevertheless, every crisis gives an opportunity and so did the pandemic. The growing online consumption of luxury cars due to the ease of acceptance of our online offerings has been a positive takeaway for us. It was a novel experience for us to launch products virtually, without customer or media gatherings. It was then very satisfying to see the great response to our new launches.
Q. Which industry trend were you surprised by or most impressed with?
The tremendous growth of online sales platforms was positively surprising. We always knew the growth potential of omnichannel sales in India, but the pandemic accelerated the online sales, and today, we are at a satisfying 15-20 percent level. I am also impressed by the reception of our digital initiatives. The online concierge, the Mercedes-Benz Studio, which offered product consultations under the contactless sales process garnered a very positive response.
Though the excitement of visiting a dealership cannot be replaced, I have to say that online consultations are here to stay.
Q. What is the most important lesson that you learnt this year?
To stay positive and compassionate to be able to address the challenges of the crisis, and, at the same time, not lose focus of your vision and keep pushing for the same. That creates a lot of purpose and energy within the team.
Q. How would you evaluate your performance as a leader in this very unusual year?
In my view, the vision that I had for the company during the crisis essentially remained the same as during normal times. Also, for my own leadership style, I would believe the same values were relevant: Be honest and transparent, infuse others with positive energy and support your team to master the challenges at hand. My vision is to transition Mercedes-Benz India into a future-ready, highly competitive company with strong expertise in digitisation and lead in creating a sustainable ecosystem. I believe we made good progress in this area and we created a good foundation for 2021.
Q. What will be the five big luxury automobile trends in India next year?
1. Continued drive towards digitisation, including growth of e-commerce.
2. More focus on e-mobility and sustainable mobility.
3. Acceleration of connectivity and AI-based features in cars.
4. Increased focus on the pre-owned car business as a growth driver.
5. Strong focus on value-based offerings in customer services.
Q. How do you predict the next year to be for the luxury automobile sector in India?
The year 2021 will see a strong recovery for 2020’s losses, as the current sales trend is expected to continue. We expect consumer demand to grow as the economy improves and business gets back to normal. We also expect more pro-industry policies from the government, which should drive growth in the sector. At Mercedes-Benz India, we have an exciting year ahead of us with many new product and segment introductions.