India overdrive: Mercedes-Benz to roll out four EVs in 8-12 months

Mercedes-Benz AG will launch four electric vehicles (EVs) in India in the next 8-12 months, said the company’s head of region overseas, Matthias Luehrs, on Thursday. Currently, four of the 20-plus models it sells in India are EVs.

Meanwhile, the German automotive corporation headquartered in Stuttgart right now has no plans to set up a car manufacturing facility in India as it has enough production capacity worldwide for the next five to eight years, he told reporters.

It currently operates one plant near Pune that assembles completely knocked-down (CKD) units. This plant can produce about 20,000 units per annum.

Mercedes-Benz is the market leader in the luxury car market of India with about 44 per cent share. Around 38,000 units were sold in the luxury car segment in India in 2022.

Luehrs then said the company did not see any further need to increase its production capacity globally. “For production, there has to be demand (local plus exports) for 300,000 units per annum. With existing production lines, we have enough capacity for five to eight years worldwide,” he had said.

It is not required to have production in India for the local market, he mentioned. “We do production for not just a single country but for the entire world,” he said.

“The Indian market does not require us to have a production facility other than the CKD facility. If, over time, we need more production capacity, we will look at India,” he observed.

India charges less tax on imported CKD cars, compared to imported completely built-up (CBU) cars. The company launched the EQC, its first EV, in India about two years ago, but the Covid-19 pandemic broke out.

The other three electric cars — the AMG EQS 53, the EQS 580, and the EQB — were launched in the second half of 2022. The demand for these EVs has been significant.

“Four all-new EVs will be coming to the Indian market in the next eight to 12 months… This will be a combination of CKDs and CBUs,” he said.

Luehrs said the company has introduced an agency model under which cars are directly sold to customers at a fixed price, and dealers get a fixed fee to hand over the unit. Under the agency model, dealers do not have to hold stock, and customers are satisfied since they get the car at the same price anywhere in India, he added.

He said the company is only focusing on EVs when it comes to alternative fuels and not on developing hybrid cars.

“It is difficult and expensive to set up infrastructure for EVs… We are confident that electric is the only right solution to deal with global climate challenges,” he said.

The ‘hybrid phase’ is over as they were alive for a certain period of time based on subsidies provided by governments, he said. Once these incentives are gone, the cars would either be electric or internal combustion engine-powered, he added.

The company has 6,000 employees at its research and development centre in Bengaluru.

“A lot of the software we deploy in cars and production lines comes from the Bengaluru centre,” said Luehrs.

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