Mercedes-Benz India will be launching 10 new products this year, including its first electric vehicle EQC. The new products will certainly help to create customer demand and the company expects customer sentiment to revive in the festive season, said managing director and CEO, Martin Schwenk. Edited excerpts:
What is your outlook for the current year, assuming that the COVID-19 impact will last till December?
Our overall outlook for the mid- to long-term remains positive and we hope for an uptick in the market sentiment during the festive season. However, the current market scenario will continue to be challenging. Our new financial programmes under WishBox 2.0, combined with our new attractive product portfolio will help create customer demand. We are swiftly ramping up production and sales ever since we resumed operations in May.
Do you think people will opt for non-essential purchases at this point in time?
We expect that the existing sentiment will shift gradually towards positive as the lockdown is lifted across the country and business starts getting back to normal.
The more the pandemic situation stabilises and ‘freedom of movement’ is restored, business will pick up and the desire for consumption will grow.
We have been witnessing a mindset towards online shopping platforms and this is an encouraging development, especially for high value items like automobiles. The upswing in overall sentiment during the festival season will see consumer spending return.
You were planning to unveil at least 10 models. Is there any change in the plan?
We have seen new products exciting customers and bringing momentum in the market. Hence, we are sticking to our plan of introducing new products in 2020. Due to the current situation, however, some delays cannot be ruled out. We will have 10 product launches this year including our first electric vehicle EQC.
What is the capex for the current year?
With most of our investments directly related to our new products, we don’t expect a significant change in capital expenditure. We are confident that 2021 will be a better year and we do not intend to change any of our mid- to long-term plans for the market. We continue to remain bullish on India and believe in India’s long-term potential.
When do you think the market for luxury cars will pick up?
The current market challenges are going to continue for some time and customer sentiment will improve gradually, but we cannot put an exact timeline to this revival. We estimate 2020 to remain a challenging year for the auto industry and at this moment, it is impossible to predict the outcome.
What has been the impact of COVID-19 on the auto sector?
The impact of the pandemic has been witnessed across geographies in the automotive sector, including luxury cars. In a market, which was already facing strong macro-economic headwinds, the sudden shutdown added up to the challenges significantly and this included the luxury auto segment. These impediments are a temporary set-back due to the ongoing situation. As a fundamentally strong brand, we are resilient, can withstand challenges and we will bounce back. Every crisis leaves with an opportunity to explore. This time it was the strengthening of our online sales platform which has emerged as the next happening trend in the luxury automotive segment.
With social distancing around, do you think that there is place for coupe or small cars?
We don’t believe that shape or size of the car would matter as long as the social distancing norms are followed responsibly by the driver and passenger. With increased social distancing norms now prevalent, we do see growth in personal mobility, but it will primarily be in the entry segment of the industry, not much at the luxury segment.