Mercedes expects double-digit growth in India in 2023 despite weak rupee

Despite the looming fear that a weakening rupee will push up car prices, Mercedes Benz remains confident of achieving double-digit sales growth in India this year. This was revealed by its local unit head during an interview.

Last year, Mercedes-Benz India’s sales soared to 15,822 vehicles—its highest ever in the country—and it has a backlog of around 6,000 orders left. Santosh Iyer told Reuters that there was risk associated with this growth – if Indian currency weakens then imported components will become more expensive and the company may have to raise domestic prices.

In 2022, the rupee plummeted 10% against the dollar – its sharpest decline since 2013 – leaving it as one of the most underperforming currencies across all of Asia. Iyer said in a statement-

“One of the biggest risks we see for us is the exchange rate. With the rupee weakening a bit more, that will lead us to more price increases. So that’s some headwind we see when it comes to the growth potential.”

He further added-

“But we are starting the year with a very healthy order bank and that gives us the confidence of a double-digit growth even for 2023.”

In 2023, Mercedes plans to launch 10 new cars in India that boast prices higher than 10 million rupees ($120,000), targeting the top-end segment of the market which experienced a stunning 69% growth rate this past year. These models will consist of electric vehicles (EVs) and plug-in hybrids as well as gasoline powered ones.

In 2022, the firm rolled out three EVs in India, which includes a locally-assembled electric variant of its well-known S-Class sedan. The demand for EVs is skyrocketing; customers are placing orders and waiting four to six months after booking their cars. To better meet customer needs and expectations, Iyer wants to reduce this wait time down to two or three months before introducing more EV models.

India’s electric vehicle sector is progressively gaining traction – Renault plans to construct a mass-market EV domestically, as per Reuters’ reportage on Friday. This action signals a revitalized effort into this market where the sale of such vehicles is expected to soar exponentially from its humble beginnings.

Tata Motors, a domestic automaker, and foreign companies such as Stellantis and Hyundai Motor have made preparations to debut their electric vehicle ranges.

Despite some easing of the global semiconductor shortage, Mercedes is still experiencing disruption due to a lack of parts and deliveries that have been delayed by various geopolitical issues, an energy crisis in Europe, and pandemic-related lockdowns worldwide according to Iyer.

He foresaw it will take up to a year and a half for things to return back to normal.

With all these factors in mind, Mercedes Benz India is confident of achieving double-digit growth this year and continuing its strong momentum. It plans to expand its dealerships across the country, provide competitive financing options, and introduce more EVs in order to meet customer’s expectations.

Ultimately, the company is optimistic that India will remain an important strategic market and contribute significantly to its global growth plans. It looks like Mercedes Benz India is all set to make a mark in the Indian market this year!

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