Mercedes-Benz To Review Operations If Diesel Car Ban Stays

If diesel car ban stays, Mercedes-Benz will review ops in India said MD & CEO Roland Folger at the AMG Coupe launch.

Roland Folger, Managing Director & CEO of Mercedes-Benz India at the launch of GLE 450 AMG Coupe. (Photo: Mercedes-Benz)

The country’s largest luxury carmaker Mercedes-Benz India, which on Wednesday launched its maiden SUV Coupe, the GLE 450 AMG Coupe, reiterated that if the ban on registration of high-end diesel cars in Delhi-NCR continues beyond March, it will have to review its business plans in the country.

The all-new sporty SUV, the GLE 450 AMG Coupe, comes with a 3-litre petrol engine and is pitted against the BMW X4 and X6.

The car is priced at Rs 86.40 lakh (ex-showroom Mumbai). The GLE 450 AMG Coupe is the first performance SUV Coupe from Merc’s stable in the country and is a product without a predecessor, Mercedes-Benz India Managing Director and Chief Executive Roland Folger said.

Roland Folger, Managing Director & CEO, Mercedes-Benz India with the new A-Class. (Photo Courtesy: Mercedes India)

Regarding the restrictions on high-end diesel cars in Delhi-NCR, he said he was hopeful of a favourable outcome.

<p>I hope the ban on high-end diesel models does not go beyond 31 March. I hope the Supreme Court takes a long-term view that really helps control emissions and air pollution. But if the ban stays longer, then we will have no other option but to review our business plans here.</p>

<b>Roland Folger, Managing Director &amp; CEO, Mercedes-Benz India</b>

The company has overtaken rival Audi by a wide margin, selling 13,502 units in 2015, up 32 percent from 10,201 units in 2014, to become the top luxury carmaker in India after five years.

Folger, who took over last October, said, “It is not fair if the regulation and the final Supreme Court view favours just one section of the industry.” “If the regulation is pitted only against us, then it is not fair. But if we have long-term, sustainable plans, then I welcome them. It cannot be that somebody gains at the cost of the other,” Folger argued.

When asked whether the company is ready to meet the new emission norms, with the government advancing the migration to BS VI directly from BS IV by 2020, he answered in the affirmative.

<p>Yes, all we need is to realign our sourcing model. We already sell Euro VI models in Europe and the US. So, we can easily meet the new emission norms well before the deadline, say as early as 2017.</p>

<b>Roland Folger</b>

He admitted that the ban has impacted sales, as Delhi-NCR is the largest market for the company, with a volume share of 20 percent.

Also Read: Why BMW’s New 7-Series Will Outscore the Mercedes Benz S Class.

The new Mercedes-Benz GLE. (Photo: Mercedes-Benz)

“But all this 20 percent loss in diesel model sales is not getting translated into actual losses as a lot of customers are switching to petrol variants. In fact, the demand for our petrol models has more than doubled,” Folger said.

He said the company already offers seven of its models in the petrol variants as well – A, B, C, E, S, CLA and GLA Classes. It also offers petrol variants in all its AMG models.

When asked whether he will be able to maintain the huge lead the company managed to clock in last year in terms of sales and market share ramp-up, he answered in the affirmative.

<p>I am sure we can maintain this lead we already have as our model offerings have positively changed over the last year, helping us give all customers what they want. The startup millionaires offer a great opportunity for us. So are the moneyed youth who number aplenty in this country now. So I’m very optimistic about this year.</p>

<b>Roland Folger</b>

He attributed the massive rise in sales, the biggest ever for the company here, to “the unsurpassed product drive and the network expansion, supported by comprehensive service and financial programmes...despite unfavourable market conditions and a slowing economy.”

Folger said last year the company’s SUV sales grew at the fastest at 100 percent, followed by the AMG models which grew 54 percent and the sedan portfolio (comprising the CLA, C-Class, E-Class and the S-Class) which clocked in a 43 percent rise in sales, taking the overall growth to 32 percent at 13,502 units.

Roland Folger, Managing Director & CEO, Mercedes-Benz India next to the Mercedes-AMG GT S. (Photo: Mercedes-Benz India)

When asked about his Budget expectations, he evaded a direct answer, saying, “Let us see what it offers.”

The powerful 450 AMG is not to be confused with the Mercedes-AMG GLE 63 Coupé, as Mercedes-AMG is a separate brand. The car can attain 100 kmph in just about 5.7 seconds, Folger said.

He said the company will launch 12 models this year, a slight scale-down from the past year when it bombarded the market with 15 launches. It will also add 10 more sales and service networks to its existing 82 centres spanning 40 cities.

In 2015, Mercedes added three new products – the GLA, CLA and the Mercedes-Maybach S 500 – to its local production portfolio and doubled the production facility to become the country’s largest luxury car manufacturer.

It assembles 8 models at its two facilities at Chakan which has an installed capacity of 20,000 units.

During 2015, the company which entered India in 1994, increased its cumulative investment in its production facility to Rs 1,000 crore, the highest for any luxury carmaker in the country.