“We are quite confident that this will be our best ever year” - Santosh Iyer, Vice President - Sales and Marketing, Mercedes-Benz India, on the new C-Class, sales and production

We catch up with Mercedes-Benz India’s Marketing head, Santosh Iyer, at the first drive of the new C-Class
Santosh Iyer at the first drive of the 2022 Mercedes-Benz C-Class
Santosh Iyer at the first drive of the 2022 Mercedes-Benz C-ClassTeam evo India

The Mercedes-Benz C-Class is a monumentally important car in the carmaker’s Indian lineup, and with the new generation coming soon, we cannot be more excited. On the sidelines of the first drive of the new C-Class, editor Sirish Chandran and editor-at-large Adil Jal Darukhanawala spoke to Santosh Iyer, Vice President - Sales and Marketing, Mercedes-Benz India about Mercedes-Benz India’s plans for the new C-Class, the challenges of production and whether this might be their best sales year ever. Read on to find out!

For us, the sedan portfolio starts from the A-Class to the S-Class and the C-Class has been a major part of it

“We have done 37,000-odd cars in the last so many years, and on an annual basis after the E-Class, the C-Class is the largest selling sedan. So for sure, from a volume perspective, it is important. Apart from the volume, this is also very core to our CKD strategy in India. This car has been there since 2001 and also there is a spot there clearly from the A-Class to the E-Class, and there needs to be a car to fill in that gap for customers to come in.”

Yes, we've got the mild hybrid

Of course in Germany, we have also got the plug-in hybrid in all the variants etc. So yes, it's electrified. For India, we said the one with the ISG makes sense because again to get that technology up a bit and also offer better driving. Because many of the customers especially in the C-Class segment drive themselves. That's why the ISG comes as standard in the C-Class with the 48-volt.”

It has scored 10 out of 10 on the quality release

We had in the COVID period startup trainers who had to come to India. We also did some joint virtual programmes along with our Thailand and other CKD market colleagues. But finally, we had a full team here on training, we have been working on this for the last six months because by December we were running out on C-Class and the production team did a great job on getting the knowledge and also making the cars built. Last I heard, it has scored 10 out of 10 on the quality release, which is a big proud achievement for our production guys.”

If you look at the Indian market, you see that there is a strong demand for diesel in some pockets

It's not like one size fits all. You can say up north in Delhi you may not see diesel demand as strong considering the legislative and other issues. But if you go towards Chandigarh, Punjab, or even Hyderabad and AP, there is a strong demand for diesel, 90 per cent of cars are diesel. From a customer preference, they also like high torquey engines to drive. Therefore we want to have our full portfolio available to customers across the spectrum. That's why we continue to put our bets on diesel. Yes, there will be a point in time when we will shift to electric fully, but till that time we continue to offer both the options.”

The diesels remain the fun-to-drive option

“One is by constraints, because if you look at the engine lineup, from the 200 if you have to see the engines which we can get for India, which can be certified, then it's the 43 and upwards on the petrols. To do the C 43 is possible, but then the price point goes significantly higher, and the C 63 also starts coming closer to the E 53. So there we have very fantastic cars, the E 53 and the C 63 for the true blue AMG enthusiasts. The fun to drive is also there on the diesels, the 300d is a very powerful engine, also now with the 48-volt. That instant torque etc. is available on the diesels as well. Therefore, we decided to stick with the diesels there. There's no suitable engine offering between the 200 and the 43.”

No plans for the C 43 AMG

“As I said, for us the price point is a challenge because it will be too close to the E 53, and we have strategically placed the E 53 there and we want to be quite focused because that gives a much bigger package compared to the C 43. In the C-Class now we don't have a coupe. In the past, we offered a different body style as well, because customers want distinction when they drive an AMG, from a series car. Since there's no availability of the coupe, we said fine we will remain with the diesel in the top-end and the AMG Line on the 300, and the true blue AMG starts from the E 53. As of now, no plans. At least for this year, I can confirm.”

If you want that extra length and different level of comfort, there is the E-Class

“I think it's very sharp positioning. If you see in the lineup the A and the C come as the standard, the E is the long wheelbase and the S is the extra-long wheelbase that we offer in India because the customer segment and the need states are such. The E-Class is mostly driven by chauffeurs over the week and on the weekends it's mostly driven by the customers. The C-Class, we have a mixed type. As I said we have core MB customers, which are close to 52-53 per cent and then the new guys who buy these cars. There is a mixture of self-drive almost all the days, and also the backseat comfort for families. With the current C-Class, what we have tried to do is that the entire 25mm increase in wheelbase, out of that 21 we were able to give to the rear passenger. It's a significantly good improvement compared to the predecessor, and it does the job of fantastic rear seat comfort with good thigh support. We don't need now to do it from a customer perspective, and if you want that extra length and different level of comfort, there is the E-Class. It's a car for each segment.”

Our own core customer group has grown up with sedans historically

“Surely, because when it comes to luxury cars, there is a clear line. One is utilitarian, the SUVs are also bought for the space and travel, and boot space is available. Plus, in many areas for road conditions also, customers feel more secure in a bigger car. That's what is driving that body style. But our own core customer group have grown up with sedans historically. In fact, when we opened the C-Class bookings we kept it only for Mercedes customers till the first of May, because we knew that they will otherwise be disappointed. We are clearly betting on a 50-50 portfolio for SUVs and sedans.”

Sold out is a factor of how many cars we produce as well as the demand

“Sold out is a factor of how many cars we produce as well as the demand, both sides. The 5000 order bank that we showed this month clearly reflects the C-Class orders also that we have got over this period of time. These ten days we have also opened it up for other customers. On the 10th, when we announce the price, we should be able to give you the exact number of cars between existing customers and between the new set of consumers who are now buying these cars for the first time, what would be those numbers. All I can say is that the demand of course is strong, our production is geared up to make high volume cars because we delayed the launch by a month so that when we start delivering we are able to give a higher number of cars. What will be the exact waiting period depends on the average production per month into the total number of cars, and by the 10th we should be able to give you a clear number.”

We are quite confident that this will be our best ever year

“If you look at our first quarter, we are at 4000 cars. 4022 to be precise. If we just do a simple extrapolation over four quarters it should cross 16,000 annually. The best year we had was 15,540-odd way back in 2017-18. If you look at simple maths, it should be the best ever year. Of course, we do know about the pandemic or any supply chain challenges. Behind the 4000 cars, April was a very good month, we have a 5000 car order. So technically, from the demand side, we don't see any issue with this being our best ever year. Supply remains a challenge. As we said yesterday, it's now chip to ships, both logistics are a huge challenge. There are many cars which are getting produced but you cannot get the car out if even one part is missing, so you need to wait for that singular part to get a quality release. Those challenges remain, but we are quite confident that this will be our best ever year.”

There is a maturity in the luxury car industry that we see happening significantly

“It's a very interesting take on the luxury market. If you take the mix that we said yesterday, earlier 40 per cent of cars that used to be sold were within the 50 lakh bracket. The top end was 10-12 per cent. If you go to 2016-17 which were the best ever years for the luxury industry which was around 40,000 cars, that pie used to be close to 50-60 per cent. The reason was the introduction of corporate editions, low-end variants etc. If you see today's industry, I don't think we'll be able to touch 40,000. This will be the best ever year for us, but it won't touch 40,000. What will happen is if you look at the absolute turnover of the luxury car market would have gone up significantly, because the top-end cars are selling. 30 per cent of our market is 1 crore plus, so my topline and also the luxury market, in general, is much more maturing to better cars, better-equipped cars than the entry-level "badge wannabe" kind of car. There is a maturity in the luxury car industry that we see happening significantly. So if you look at absolute numbers you'll say this market is not there. But I think the maturity has happened with the top-end and the super-luxury cars. Real luxury cars are being sold now than the badges that used to get sold in the past That's the fundamental difference of what we see from 2018 to 2022.”

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