Mercedes-Benz India - Comprehensive Analysis Report

Summary

Mercedes-Benz India Pvt. Ltd., established in 1994 as a wholly-owned subsidiary of the German Mercedes-Benz Group, spearheaded the luxury car market in India. The company's mission is to inspire and create an exceptional workplace and business environment, focusing on transparent operations, premium inventory, and tailored customer care to deliver a superior luxury shopping experience. Its vision is to be the most successful premium manufacturer in the industry. Mercedes-Benz India is involved in designing, manufacturing, importing, and selling passenger cars, commercial vehicles, and auto components and offers a range of products, including petrol and diesel engine cars, buses, parts, accessories, apparel, and merchandise.

1. Strategic Focus & Objectives

Core Objectives

Mercedes-Benz India focuses on innovation, sustainability, and customer trust. The company aims to promote road safety, environmental sustainability, and societal development. A key objective is to expand its electric vehicle (EV) portfolio, alongside embracing digitalization, simulation, and data science to enhance operations and products. The company is also focusing on the top-end luxury segment.

Specialization Areas

Mercedes-Benz India specializes in automotive engineering, digital development, and advanced simulation techniques. A key area of expertise lies in developing synchronized solutions that align the development cycles of web technologies and consumer electronics with the automotive industry's demands.

Target Markets

Mercedes-Benz India targets the luxury car market in India. The company aims to position itself as a leader in the premium segment, catering to the increasing demand for luxury vehicles driven by economic growth and evolving consumer preferences.

2. Financial Overview

Funding History

Mercedes-Benz India's operating revenue exceeded INR 500 cr for the financial year ending on March 31, 2024. The authorized share capital is INR 1,250.00 cr, and the total paid-up capital is INR 1,185.83 cr.

3. Product Pipeline

Key Products/Services

Electric Vehicle Expansion:

Description: Mercedes-Benz is expanding its green car portfolio to include six models.

Development Stage: Planning to launch its smallest electric SUV, the EQA, and solidifying plans for the introduction of the EQS Maybach and electric G Class SUVs.

Target Market/Condition: Luxury car market in India, focusing on consumers interested in electric vehicles.

Expected Timeline: Ongoing, with new models expected to be introduced in the near future.

Key Features and Benefits: Expands the range of electric vehicle options, catering to different consumer preferences and potentially increasing market share.

Current Electric Range:

Description: The electric range includes the EQS limousine, EQB MPV, and EQE SUV.

Development Stage: All assembled at its factory outside Pune.

Target Market/Condition: Indian luxury electric vehicle market.

Key Features and Benefits: Offers a variety of electric vehicles.

4. Technology & Innovation

Technology Stack

Mercedes-Benz Research and Development India (MBRDI) plays a significant role in developing technologies related to connected, autonomous, and electric mobility. MBRDI focuses on computer-aided design and simulations (CAD and CAE) for powertrain, chassis and exteriors, embedded systems, telematics and IT applications and tools.

5. Leadership & Management

Executive Team

Managing Director & CEO: Santosh Iyer

Directors: Vyankatesh Vijay Kulkarni, Santosh Gopal Iyer, and Emrah Ozer

Recent Leadership Changes

Santosh Iyer is the first Indian CEO to head Mercedes-Benz India.

6. Competitive Analysis

Major Competitors

BMW: A major competitor in the Indian luxury car market. In 2023, BMW sold approximately 14,000 vehicles in India, showcasing substantial market presence. In 2021, BMW reported a 34% year-on-year increase with 8,236 vehicles sold.

Audi: Another key competitor. In 2023, Audi's sales in India were around 8,000 vehicles. In 2021, Audi reported a 101% increase with 3,293 vehicles sold compared to 2020.

Volvo, Jaguar Land Rover, Lexus, and Porsche: Other luxury brands in India.

Mercedes-Benz also considers Systematic Investment Plans (SIP) and Indians' savings habits as indirect competitors, influencing consumer spending in the luxury segment.

7. Market Analysis

Market Overview

The Indian luxury car market is experiencing growth driven by rapid economic expansion and an increasing inclination towards luxury purchases among younger consumers. Luxury car sales constitute slightly over 1% of India's total car market, which sees approximately 4 million units sold annually. Mercedes-Benz India anticipates the luxury car segment to reach 52,000 units in 2024.

8. Strategic Partnerships

Mercedes-Benz India has formed several strategic partnerships to enhance its operations and innovation:

ExxonMobil India: A 30-year partnership, indicating a long-standing collaboration in lubricant technology and supply.

Department for Promotion of Industry and Internal Trade (DPIIT): A Memorandum of Understanding (MoU) to foster innovation, sustainability, and entrepreneurship within India’s startup ecosystem.

Indian Institute of Science (IISc): MBRDI has signed an MoU with IISc for collaborative research in sustainable mobility and electric vehicles.

Birla Institute of Technology and Science (BITS) Pilani: MBRDI has signed a five-year Master Research Agreement (MRA) with BITS Pilani for advanced technology research.

9. Operational Insights

Mercedes-Benz India has the widest network reach among luxury car makers in India, present in 47 cities. The company’s plant in Maharashtra, established in 2009, spans 100 acres. Mercedes-Benz India is integrated into Mercedes-Benz's Global Production Network, playing a crucial role in the CKD/MVP production network in Brazil, Indonesia, Malaysia, Thailand, and Vietnam. The company is also leveraging learnings from its direct-to-consumer retailing model in India to inform global market strategies.

10. Future Outlook

Strategic Roadmap

Mercedes-Benz is prepared to invest $500 million in the Indian EV business, contingent on maintaining a consistent 5% GST for EVs over the next decade. The company is focused on expanding its green car portfolio and local production capabilities. Mercedes-Benz India is also scaling its direct-to-consumer 'Retail of the Future' model globally, building on its experiences in the Indian market.