‘High GST May Hurt Mercedes’ Ex­pan­sion Plans’

The Economic Times - - Companies: Pursuit Of Profit -

tax struc­ture im­pact for­eign car­mak­ers? The de­ci­sion to re­vise the cess for lux­ury cars once again un­der­lines the need for a long-term road map for the lux­ury car in­dus­try, which has been af­fected by ar­bi­trary poli­cies. The con­tin­u­ous change in pol­icy makes our long-term plan­ning for the mar­ket highly risky, and this would have an ad­verse im­pact on the coun­try's fi­nan­cial rat­ings. By mak­ing bet­ter tech­nol­ogy pro­hib­i­tively ex­pen­sive and in­ac­ces­si­ble, the gov­ern­ment is caus­ing more dam­age and slow­ing down the pace of eco­nomic growth.

Can you tell us what has been the trend for the lux­ury seg­ment in terms over­all sales, and also in terms of high-de­mand prod­ucts? The over­all lux­ury seg­ment is be­hav­ing flat, be­cause of the tax­a­tion is­sues we face now. So, we do not see a huge jump any­where. But what has been very en­cour­ag­ing is that the growth was mainly in­flu­enced by SUVs. This pos­i­tive de­vel­op­ment — in 2014-15, an in­crease of 100% in SUVs — has en­cour­aged us to bring up to 6 or 7 SUVs into Indi a. The main con­tri­bu­tion to growth came from SUVs, and it will con­tinue to come from SUVs.

Amid the dis­rup­tions, what helped Mercedes re­main the No. 1 lux­ury car brand in In­dia for two years? Some­where in the mid­dle of 2015, we had gone after our com­pe­ti­tion as far as prod­uct avail­abil­ity — of mul­ti­tude of prod­ucts — was con­cerned. We were also ad­dress­ing all the right places, es­pe­cially in the In­dian mar­ket which was just at the brink of de­vel­op­ing an SUV mar­ket in the lux­ury car seg­ment.


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