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Mercedes Benz to consider reviewing operations in India if diesel car ban stays beyond March

Mercedes Benz to consider reviewing operations in India if diesel car ban stays beyond March
Nikhil Puthran Nikhil Puthran Wednesday 13 January 2016, 16:21 PM

The country's largest luxury carmaker Mercedes-Benz India, which recently launched its maiden SUV Coupe, the GLE 450 AMG Coupe, reiterated that if the ban on registration of high-end diesel cars in NCR continues beyond March, it will have to review its business plans in the country. The newly launched sporty SUV, the GLE 450 AMG Coupe, comes with a 3-liter petrol engine and is pitted against the BMW X4 and X6. The vehicle has been launched for Rs 86.40 lakh (ex-showroom Mumbai). The GLE 450 AMG Coupe is the first performance SUV Coupe from the Merc stable in the country and is a product without a predecessor, Mercedes-Benz India Managing Director and Chief Executive Roland Folger said.

Regarding the restrictions on high-end diesel cars in Delhi-NCR, he said he was hopeful of a favourable outcome. Folger further said to PTI, "I hope the ban on high-end diesel models does not go beyond March 31. I hope the Supreme Court takes a long term view that really helps control emissions and air pollution. But if the ban stays for longer, then we will have no other option but to review our business plans here.” The company has overtaken its rival Audi by a wide margin, selling 13,502 units in 2015, up 32 per cent from 10,201 units in 2014, to become the top luxury carmaker in India after five years. Folger, who took over last October, said, "It is not fair if the regulation and the final Supreme Court view favours just one section of the industry. If the regulation is pitted against us only, then it is not a fair. But if we have long term, sustainable plans, then I welcome them. It cannot be that somebody gains at the cost of the other.”

When asked whether the company is ready to meet the new emission norms, with the government advancing the migration to BS VI directly from BS IV by 2020, he answered in the affirmative. "Yes, all we need is to realign our sourcing model. We already sell Euro VI models in Europe and the US. So, we can easily meet the new emission norms well before the deadline, say as early as 2017," he said. He admitted that the ban has impacted sales, as Delhi-NCR is the largest market for the company, with a volume share of 20 per cent. "But all this 20 per cent loss in diesel model sales is not getting translated into actual losses as a lot of customers are switching to petrol variants. In fact, the demand for our petrol models has more than doubled," Folger said.

He said the company already offers seven of its models in the petrol variants as well - A, B, C, E, S, CLA and GLA Classes. It also offers petrol variants in all its AMG models. When asked whether he will be able to maintain the huge lead the company managed to clock last year in terms of sales and market share ramp up, he answered in the affirmative. "I am sure we can maintain this lead we already have as our model offerings have positively changed over the last year, helping us give all customers what they want. "The startup millionaires offer a great opportunity for us. So are the moneyed youth who number aplenty in this country now. So am very optimistic about this year," he added. He attributed the massive rise in sales, the biggest ever for the company here, to "the unsurpassed product drive and the network expansion, supported by comprehensive service and financial programmes...Despite unfavourable market conditions and a slowing economy."

Folger said last year the company's SUV sales grew at the fastest at 100 per cent, followed by the AMG models which grew 54 per cent and the sedan portfolio (comprising the CLA, C-Class, E-Class and the S Class) with 43 per cent rise, taking the overall growth to 32 per cent at 13,502 units. When asked about his budget expectations, he evaded a direct answer, saying, "Let us see what it offers." The powerful 450 AMG is not to be confused with the Mercedes-AMG GLE 63 Coupe, as Mercedes-AMG is a separate brand. The car can attain 100 kmph in just about 5.7 seconds, Folger said. He said the company will be launching 12 models this year, a slight scale down from the past year when it bombarded the market with 15 launches. It will also add 10 more sales and service networks to its existing 82 centres spanning 40 cities. In 2015, Mercedes added three new products - the GLA, CLA and the Mercedes-Maybach S 500 - to its local production portfolio and doubled the production facility to become the country's largest luxury car manufacturer. It assembles 8 models at its two facilities at Chakan which has an installed capacity of 20,000 units. During 2015, the company which entered India in 1994, increased its cumulative investment in its production facility to Rs 1,000 crore, the highest for any luxury carmaker in the country.

 

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