RBI rate relief to luxury car buyers but exchange rate concerns remain, says Mercedes-Benz India
KOLKATA: The recent
RBI
interest rate reduction provided much-needed relief to luxury car buyers. Some of the price hikes that carmakers were forced to implement in recent years were offset by the rate cut, which helped maintain relatively stable EMIs.
Speaking to TOI on the occasion of the introduction of the brand's first hyper-personalisation in India on Thursday,
Mercedes Benz
India (MBI) Managing Director and CEO Santosh Iyer said Mercedes Benz Financial, the company's non-banking financial arm, passed on the benefits from the RBI repo rate cut to customers. This offered relief and helped maintain relatively stable EMIs despite rising vehicle prices.
However, luxury carmakers, including MBI, continue to be concerned over the exchange rate.
It is this adverse forex situation that forced Mercedes Benz to implement three price hikes this year. "The euro-rupee equation was particularly challenging, moving from Rs 85-88 to nearly Rs 98 to the euro," explained Iyer.
The adverse exchange rate impacts both CKD parts, which comprise 91% of the vehicles sold, and CBUs that make up the rest. "Market sentiment remains mixed, with positive indicators including strong capital markets and healthy GDP growth.
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Tax collections are high, and spending continues, but currency valuation impacts make vehicles more expensive," Iyer explained.
The luxury car market has shown resilience, growing by 7-8% in certain segments. Electric vehicles have been a bright spot, with luxury EV penetration increasing from 7% to 11%. "Mercedes Benz has outpaced the luxury electric segment growth, recording a 73% increase compared to the industry's 66%," Iyer noted.
The company's top-end segment continued to show strength, particularly with models like the G-Class, EQS SUV, and Maybach EQS SUV. Mercedes-Benz Research & Development India (MBRDI) Managing Director & CEO Manu Saale highlighted the facility's contribution to the company's evolution. "As the largest R&D centre for Mercedes outside Germany, we're integrating Indian expertise into global operations," says Saale.
MBRDI played a key role in shaping the India-inspired Collector's Edition of the AMG G 63, which includes etching the owner's name on the grab handle. "MBRDI's current focus centres on two primary areas. The first is digital twin technology, where physical processes are digitised throughout the automotive development chain.
This advancement accelerates development timelines whilst reducing costs. The second area involves customer-facing digital features, including infotainment systems, Advanced Driver Assistance Systems (ADAS), and electric vehicle charging solutions," added Saale.
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