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"We are taxed to hell and back"

Roland Folger, Managing Director and CEO, Mercedes-Benz India, tells Sumant Banerji about leadership, luxury and managing disruption in business
Sumant Banerji   New Delhi     Print Edition: September 24, 2017
Photo: Vivan Mehra

Q. Overall luxury car volumes in India have been stagnant since 2015. What is stifling the industry?

It's primarily prices. We are super expensive in India because we are taxed to hell and back. Our overall market penetration in Germany is 24 per cent; in China they sell seven times more cars than India and 53 times more in the luxury segment. That is a factor of seven. It has to do with taxation.

Q. The pole position in India's luxury car market has changed thrice in the last eight years. What do you make of that?

Leadership includes an attractive product portfolio, good resale value to justify the premium position and really good after-sales service. You also need a dense network so that you are close to customers. It is a winning formula we have been able to create in the last few years. In the past may be we were sitting on our laurels thinking we would own this position.

The volume game is important as the more vehicles we sell, the more it opens up the possibility of bringing in more products. Currently, we produce nine products locally in India; if we want to expand that range, we need to sell more volumes.

Q. There is a fixation among manufacturers to be no. 1. Does it really matter?

It is driven by customers. My dealers tell me we never want to go through such a position again where we as a former no. 1 brand had to answer our customers why we are not no. 1 anymore. The customer loves to buy a brand that is on top. Whether we like it or not, the volume game will dictate a brand's success.

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