‘It will be difficult to grow the EV penetration with such high import duty structure’: MD & CEO Mercedes-Benz India

German luxury car maker, Mercedes-Benz, continues its growth trajectory in India riding on the success of AMG and EQC models. It seems quite bullish on the EV market and its future in India and promises to bring its global range here as well to occupy a handsome market share by 2025. Yet, the existing import duty structure bothers Mercedes-Benz and wants government to rationalise it for better adoption of luxury and EV cars in India. Starting next year, it has also decided to increase the cost by 2 per cent on selected models to justify the rising input costs. We spoke to Martin Schwenk, MD and CEO of Mercedes-Benz India on various topics to understand company’s point of view and its future roadmap. Edited Excerpts:

How do you summarise the Covid-19 affected year 2021 for Mercedes-Benz in India, which later transitioned into chipset crunch era for the auto industry?

We were bullish about 2021 and the year has turned out to be a better one than we expected, though the industry had its fair share of challenges. We launched new products, redefined business landscape with Retail of the Future at the same time ensured our partners and employees are safe. 2021 is no less than a roller-coaster year but with more accomplishments in business, but also incurring a deep humanitarian crisis.   

What has been the response so far on your Retail of the Future initiative and is it helping Mercedes-Benz clear the roadblock if any between company and the end buyer?

Retail of the Future has taken off to an overwhelming customer acceptance and that beats our expectations. We already have delivered more than 1000 Mercedes-Benz cars to the customers and have an additional 2000 units order bank which we going to hand over. It is impressive to see the customers’ and our Franchise Partners showing such positive acceptance which gives us confidence that ROTF is the future of luxury retail landscape 

What would be the composition of EV in Mercedes-Benz line-up for Indian market? Do you plan to launch a new car under this emerging segment this year or it will push to next year launch roadmap?

We have a planned roadmap for the EV portfolio’s expansion in India. Till 2021 EQC was our sole EV in the Indian market, going forward we will introduce some of the most advanced luxury EVs for our customers in India. In coming years we will launch most of the EVs in our global portfolio in India and we estimate a very good share of our volumes will be comprising BEV by 2025.

EQC’s market success makes us confident of the success of future EVs like the EQA, EQS, EQE etc. 

What do you think of the duty structure on EVs in India?

The current duty structure in India does not give an advantage to world-class technologies that latest generation EVs features. Mercedes-Benz has been highlighting the need to rationalize the import duty structure for EVs and other high-tech cars like the AMG range to achieve cost parities with the ICEs for the consumers and trigger a faster adoption among luxury EV users. It will be difficult to grow the EV penetration with such high import duty structure which continues to be barrier of the segment growing   

The competition is aggressively focusing on EV as fuel prices breaks new record in India. Do you wish to make any changes in the future launches to deal with it?

We have a very ambitious EV strategy in India as we witness the transition of ICEs into EVs. However, this will not happen overnight and will take some more years. We have a very robust and highly modern EV portfolio, which will also be launched gradually in India. Saying that, our ICE portfolio will continue to witness some most desirable product introduction in 2022.

How do you want to conclude the year 2021?

We will end 2021 with a strong double digit growth and it will be an important year where we achieved business successes and strengthened our customer centric approach even more