Mercedes-Benz sets eyes on smaller cities to fuel further growth

New Delhi: German carmaker Mercedes-Benz is looking to expand its presence in the smaller cities in India where demand for luxury models is expected to grow robustly over the next few years.

The automaker, which on Wednesday introduced new GLA and AMG GLE 53 models, plans to enhance its sales and service infrastructure in the non-metro cities to cater to the needs of the increasing number of customers.

"We are clearly seeing that there is a lot of growth happening in mini metros in India and we are now increasing customer car parc in these cities," Mercedes-Benz India Managing Director & CEO Santosh Iyer told PTI in an interaction.

To cater to the needs of the customers, the company is opening up 20 new workshops in 10 new cities like Jammu, Kanpur and Patna, he added.

"So we are very clear that in these mini metros, customers should not be driving a car for more than two hours to get the service done. So you want to go closer to these customer pockets," Iyer said.

The penetration of luxury cars in such cities remains low as compared to the metros and thus offers more opportunities for growth, he noted.

For Mercedes, top metros currently account for around 70 per cent of the sales annually.

"Rest 30 per cent comes from... mini-metros and other smaller markets," Iyer stated.

The luxury car market in India accounts for just over 1 per cent of the total passenger vehicle sales of around 40 lakh units annually.

Mercedes-Benz is currently the leading player in the market.

Iyer said for Mercedes-Benz in the eight large cities and metros, the penetration level is at 2.5 per cent but in the smaller cities and towns, it is at 0.4 per cent.

On Wednesday, the company launched the new GLA SUV priced between Rs 50.5 lakh and Rs 56.9 lakh (ex-showroom).

The AMG GLE 53 4MATIC price starts at Rs 1.85 crore. It can be customised with over 7,000 combinations with prices going up to Rs 2.2 crore.

"The new GLA is a stepping stone into the SUV family..the new AMG GLE 53 Coupe receives further comfort enhancements and performance upgrades," Iyer said.

The SUV sales accounted for 55 per cent of the company's total sales in 2023, he noted.

These new models will further develop the desirability of the SUV portfolio, Iyer stated.

Mercedes-Benz India also unveiled the Concept EQG, underlining its commitment to an all-electric future.

Concept EQG is the near-production version of the G wagon which is electrified to meet the company's sustainability goals.

The model will debut later this year and is expected to be launched in the Indian market as well.

The company, however, did not give any specific date for its debut in India.