‘High GST May Hurt Mercedes’ Expansion Plans’
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.