India fastest growing market for Mercedes-Benz in the last few years: CEO Ola Kallenius

Kallenius, who visited India earlier this year to review operations and meet policymakers and industry leaders, said: “We had a very constructive meeting (in India). And you get a sense in India, it’s like the 21st century belongs to India. There is such a buzz, such a pulse. The country is on the move … We’re ready. If the Indian market takes off even faster, we’re going to be there.”

The company sold 15,822 vehicles in India in 2022, up 41% from the year before and its highest annual sales on record in the South Asian country. The German automaker, which has a share of nearly 50% in the luxury vehicle segment in India, is now on track to report record sales for the second straight year in the Indian market in 2023.

The Indian market can grow many-fold in the long term, considering the demographic dividend, along with progressive policies to promote electrification, Kallenius said.
To be sure, high-tech internal combustion portfolio is the mainstay currently for the company, but he said “the future is going to be electric in India as well”.Mercedes-Benz India sells four electric car models in the local market.“It’s not going to be a straight line and we have to run the whole marathon, but we have already started investing also in Mercedes-Benz charging infrastructure in India to offer (charging stations to) our customers at the right spots,” he said.Mercedes-Benz globally is looking at introducing two all-electric vehicles on the Mercedes Modular Architecture. The first of these, the Concept CLA, will go into commercial production in 2025 will be introduced in India simultaneously with its global launch.

Kallenius said the luxury carmaker has its largest R&D set-up outside of Germany in Bengaluru. The 5,000-odd strong team of engineers there is working on all global development projects for Mercedes-Benz. India is also one of the four countries (along with the US, Israel and Germany) leading the projects on data security at a time when the automotive industry is moving towards electric, connected and autonomous technologies, he said.

India is promising in terms of the available human capital when compared with ageing mature economies in the West, he said.

On the need for having more growth-oriented labour policies in Germany, Kallenius said: “I would not expect big political changes in terms of the labour laws and the labour flexibility, but I would caution if one would put more restrictions … (say) start a debate that we should work less hours at the same pay, those type of things. That would be going the wrong direction, if we want to be able to compete with India, with China, even with material economists like the United States.”

Kallenius said there is a need for a more structured immigration policy to encourage young talent from elsewhere to come and settle in the West. “I think all regions need to think about human capital. If your own demographics do not allow growth, you need to be the place to be. You need to be the place where people from around the world want to seek their economic future, their future for the family,” he said. “So, (we need) intelligent and structured immigration to deal with labour shortages in some areas and something I think it’s something that Europe needs to think about.”

(The reporter is in Munich at the invitation of Mercedes-Benz AG)