We caught up with Santosh Iyer at the launch of the new Mercedes Maybach S-Class, the latest locally-produced Maybach to be sold in India. Being the absolute pinnacle of the Mercedes family, it is a huge launch for the company. We also talk about future models, the EV strategy, new retail policy and much more. Read on to find out!
Aatish Mishra: We’re in the third month of 2022, how have the sales been so far?
Santosh Iyer: I think it's been as per expectations. We expected the year to start well in January and February. We were a bit apprehensive with the third wave of Covid, and we could see some drops in walk-ins and enquiries, but it was a matter of one fortnight. The sales have recovered, demand is stronger. The demand is at an all-time high, even compared to pre-Covid times. So sales is not a challenge as long as the supply side is improving. Also there we have some green shoots, we have much better supplies now compared to what we had, around 20-30 per cent better. But of course, the demand is more than what we can supply. That’s where the gap is, you can also see many of the cars being sold out for months or years also now, but we will catch up. Our colleagues are also working tirelessly to see how we can change the game. But the uncertainties continue also with what we are seeing happening in Europe now, it's a matter of time. This year will be like this but the good part is that demand is strong.
AM: Are SUVs still driving sales?
SI: SUVs show the largest growth in what we do, but frankly, the biggest volume car for us is the E-Class long wheelbase. That's the largest car in our portfolio and the largest sales volume in our portfolio. But when you look at percentile growth, of course, SUVs grow year-on-year at a much bigger pace.
AM: You said 10 new cars for 2022. This is the first one, what’s coming next?
SI: We already mentioned we will localise the EQS in India, so that’s on the cards. The C-Class is due, I think it’s no longer a secret, it will come sometime in the second half of the year, we are trying to see how early we can get it. These three we have already got out of ten, there’s seven more.
AM: What about products from AMG?
SI: Let’s see what is coming from AMG. A good amount of line up, we have seen the AMG growth has been phenomenal, we grew at close to 101% last year, so that shows the love for the brand and the products, so there we will also not hold ourselves back, so we are trying to get a sufficient number of cars, no point in getting one or two, so we are trying to do that. And AMGs will form a big chunk of these cars.
AM: You mentioned the EQS being locally assembled here. How will that feature in your ultra-luxury lineup?
SI: The customer is the same profile, so many of them will buy a Mercedes Benz Maybach and then they will buy an EQS, because they have multiple cars in the family, it's not that these are the only cars. The first set of buyers in the first two years will be the current set of our customers who are already waiting, who are already asking if we’re taking booking and we have to say no. That’s not a challenge for us. It will be interesting to see who will be coming after that. Maybe it is the current E-Class customers who are buying an E-Class today but in the next two years they upgrade to an EQS, but that takes time for the maturity of the market and also how that develops. What we see for sure, is that when I meet every customer to whom we deliver a car, they all say “Santosh my next car will be an EV”. That’s a very resounding statement from the current target group. These cars we introduce will surely find a lot of customers from the E-Class or the S-Class. But that will be after two years. The current ones will all be what we call the ‘luxury dwellers’ who are right now in the segment.
AM: If your customers are saying they’re interested in EVs, do you see the potential for something like an EQS AMG in India?
SI: The potential is there, frankly, for the entire lineup. The first filter is it ticks that box. But is it available worldwide? Because again, demand for AMG, like the G you saw is almost sold out for one-one and a half years right now, it’s just not available.
AM: With EVs are you all taking a top-down approach so can we expect more affordable EVs from Mercedes Benz?
SI: It’s not affordability that we stand for. We stand for luxury and innovation. All the cars that will be there, but if you ask now, will we come in the Rs 60-70 lakh segment, that will need more localisation and more new cars. We don't see anything happening this year at least, but in the future, that is the way to go. We have said that we will exit ICE and go into EVs, so we will definitely see cars at all price points.
AM: Let’s talk about Retail of the Future. How is it working out for you and all of your stakeholders?
SI: I think we have already successfully crossed the bridge now in terms of all the apprehensions it had, all the questions it triggered with the sales team and franchisee partners. The good part is everybody is convinced. When I say everybody I mean the franchisee partners, the consultants, the customers and of course us, because today the huge order intake that we are able to take, this transparency would not have had in the earlier model. Today I know every day which customer is booking a car. Once he or she books a car I'm able to communicate with him or her on that journey because we have the full data, the booking and everything else is transparent. So from the customer's point of view that apprehension, the haggling and all is gone. They are all welcoming it because they are assured that the price is right. In the first two-three months they went to different franchisee partners, tried and even now we see 10-15 per cent of them trying, but then they have realised that this is the price and they appreciate it. Secondly, every partner is offering the same car, the same colour as what is available. Within the same system, they can come online and see the same car, so that transparency is helping to increase more trust and confidence in the brand.
AM: Let’s talk about today’s launch. The Maybach you’re locally assembling in India, you previously have done the same as well. There’s obviously a value in doing that. So how important is Maybach in India?
SI: Firstly from a customer point of view, we sell a good amount of cars in this segment. In the two crore+ segment we sell over 2000 cars in India. So that shows a lot of affinity to the brand. We are not the brand that comes out with stripped out models or we come in the lower end of the segment. I think we have very good cars there, but only 20 per cent of my portfolio is below 50 lakhs. Rest all we sell in the top end. So it’s our responsibility to get this car, because our customers demand it, and then to localise it is also our responsibility. What we have done in localisation is that there is no feature that is missing, so whatever I explained today, everything is standard in the car, it is not optional in the localised car, and that is something our team is very clear on, that we won't offer a product that has less content and features and we will price it high. Our customers are ready to pay value and price if it is loaded correctly. So that’s something we learned and we will continue with that strategy.
AM: What’s the rationale for offering two different variants?
SI: It’s only individualisation. Frankly speaking, the S580 has everything that a customer needs but it's available in four colours because I had my paint shop limitations. The S680 has ten colours and dual-tone paints. Interiors are standard, and although it has reclining seats, the S680 can have individual seats, which may not be possible on a localised car. So basically, we have gone and given some more options for customers to customise. And then small bells and whistles like the urban guard package and others which is available there. Otherwise, everything is present in a locally-produced Maybach.
AM: Now, this is priced at Rs 2.5 crore. That’s very close to the Rs 2.2 crore that you’ve launched the CBU S-Class at. Would that upset customers who went in for that car?
SI: No, they were the first in India to own the CBU S-Class and they are very happy with that. The configuration was as good as the Maybach, almost. It has, for example, rear-axle steering which will not be there in the Maybach. So I think we have also smartly done this and they are proud first owners of the new generation S-Class in India.