Mercedes-Benz Opens 2nd Showroom in Hyderabad, Sees Flat Sales On Uncertainty Over Diesel Cars, GST

Hyderabad: Luxury car maker Mercedes-Benz India, which had record sales in 2015, expects the figures to be flat this year due to the continuing uncertainty about diesel vehicles as well the tax scenario under GST. Given this background, the company is geared up to launch four more models before December and appoint three more dealers to drive volumes, Mercedes India MD and CEO Roland Folger said here after inaugurating its second showroom, Silver Star on Banjara Hills road in Somajiguda, on Monday.

With Silver Star dealership, the total number of outlets in country rose to 87 spread over 40 cities. Mercedes-Benz is planning to open 10 more new outlets and roll out 12 new products this year.

Late August, the Supreme Court lifted nine-month-old ban on sale of 2-litre and above diesel models in the National Capital Region after companies agreed to pay one per cent green cess to the government.

"Last year, we sold a record 13,502 vehicles, a growth of more than 32 per cent over 2014. This year hopefully it is going to be roughly in the same range," Folger said.

When asked about capacity, Folger added "the 20,000-unit Pune plant has enough capacity to produce for the next two to three years. Events like the diesel car ban in Delhi-NCR and GST now are bringing factor of uncertainty into our overall planning and we tried to deal with it the best way possible. By September we have petrol versions for all our models."

On GST, he said "there are many theories floating in the market with regard to the car prices once the tax regimen is implemented." He, however, did not elaborate on them. In the September quarter, Mercedes sales marginally declined to 3,327 units from 3,420 units a year ago. Since last December through this August, none of the auto companies could sell most of their models in Delhi NCR, which is the country's largest auto market, following the Supreme Court ban on above 2-litre diesel models.

Since the Delhi-NCR market gives around 30 per cent of volume to Mercedes, this forced the company to introduce petrol variants of all its models. The ban had Mercedes' sales declining by 1.5 per cent to 9,924 units from 10,079 units in the first nine months of this year, while for the September quarter its sales declined 2.7 per cent primarily due to higher base effect and the apex court's ban.

"We had said that we would be launching 12 new products this year and 10 new outlets. This (Silver Star in Hyderabad opened on Monday) is the seventh outlet, which means three more outlets. In terms of products, we have launched eight and four more are in the pipeline, he said without giving details.

Amit Reddy, MD of Silver Star, said: "We have set up this dealership at a cost of Rs 37 crore. Our 50,000-sqft workshop is located at Sanathnagar and this can serve 6,000 cars per annum."

Folger said south Indian market has been a major contributor to the sales of Mercedes-Benz.

Source: PTI