Mercedes maintains the top spot in luxury car segment for 5th year in a row
Sumant Banerji January 10, 2020
German luxury carmaker Mercedes Benz India emerged as the largest selling luxury car brand in India in 2019 even as its sales skidded by 11.3 per cent, the steepest ever in a year in well over a decade.
With this, Mercedes has held on to the number one position for the fifth consecutive year bettering the four-year reign of arch rival BMW between 2009 and 2012. The Stuttgart-based company, which also holds the pole position in global luxury car sweepstakes, sold 13,786 units in India last year against 15,538 units in 2018.
"We are satisfied with our sales performance in 2019 despite facing strong macro-economic headwinds, specifically in the first three quarters. We were, however, able to create a strong growth momentum in the market during the festive period and are glad to carry it for the rest of the year. Our growth in our Q4 sales, which is the highest ever for us, is a testament of this fact," said Martin Schwenk, Managing Director & CEO, Mercedes-Benz India.
The slowdown in the overall Indian economy in general with GDP growth projections sliding to just 5 per cent for 2019-20, and in the domestic passenger vehicle market in particular, where sales have declined in double digits this fiscal so far, has impacted the luxury car segment as well. Industry volumes are estimated to have declined by over 13 per cent, the steepest ever in a year and for the first time since 2016 when sales had declined by nearly 8 per cent. Volumes have remained range-bound in the 35,000-40,000 unit per annum band since 2015 and is significantly lower than earlier projections of about 100,000 units by 2020.
Schwenk said he was cautiously optimistic about this year, which is likely to see another round of disruption in the automobile industry with the onset of BS VI emission norms in April.
"2020 is going to be another important year for us in India and we continue to be optimistic with the country's mid to long-term prospect. We had an overwhelming response to our entire BS IV portfolio and we are now ready with the all-new BS VI portfolio, way ahead of the deadline," he said. "This year the market will witness a strong product offensive from us beginning with the new GLE SUV, followed by some of the most significant product introductions from our global portfolio for the Indian market, including those without any predecessors. These products will redefine luxury and performance motoring and chart new avenues for sustainable mobility in India. In 2020, Mercedes-Benz will also witness strategic network expansion in key existing as well as new markets."
Arch rival BMW managed to sell about 9,641 units in 2019, a 13.2 per cent decline over 11,105 units of 2018 while Audi registered its third consecutive annual decline as sales crashed 29 per cent at 4,594 units in 2019. For the Volkswagen group's Ingolstadt-based luxury carmaker, this was a significant climb-down from its performance in India between 2012-15 when it had emerged as the leader of the pack and was the first to top sales of 10,000 units in a year.
"The auto industry faced strong headwinds in 2019. Economic slowdown in India last year tapered customer sentiment and potential car buyers delaying their buying decision. It was a challenging year as there was ambiguity about the life of BSIV vehicles on- road in the customer's mind and an anticipation for GST reduction on cars; both of these topics were later clarified by the government. The year also saw the tightening of loans availability to dealers and customers, which negatively impacted the sales of luxury cars. Also, some markets did not perform as per our expectations," said Balbir Singh Dhillon, Head of Audi India.
Dhillon added that while he expected sales to remain subdued in 2020, a revival could be in the offing next year.
"We have been optimistic about the growth of luxury car segment for many years on the back of the India growth story, which still remains intact. We believe that the luxury car market will take a leap jump sometime in the future, we only don't know when," he said. "In terms of growth estimates for the luxury car market, we estimate it to remain flat in 2020 and we are hopeful of positive growth / revival starting 2021. We will bring in new BSVI compliant models, new technologies, introduce digital measures and other services in India that will boost the sale of Audi cars in the year 2020 and beyond."