The luxury carmaker is focusing on localising production to boost electric car sales, with the EQS SUV being the second electric vehicle the company will manufacture in India, after the EQS sedan.
Currently, fully assembled imported cars pay a 110% tariff, while completely knocked down imported cars pay an 18% tariff. For this reason, Mercedes-Benz has decided to localize the production of at least two of its electric models. Currently, Mercedes-Benz manufactures 11 of its models locally in the country.
Read also: Mercedes EQS SUV launched in India with 809 km range; check price, features
Santosh Iyer, Managing Director and CEO of Mercedes-Benz, said in an interview with CNBC-TV18 that local manufacturing saves costs. “We need to bring the cars to a price level where they are more acceptable to customers. Currently, 90% of our demand comes from the 11 models manufactured locally in India,” he said.
Iyer explained that while Mercedes localises production of cars that reach a certain scale in India, electric vehicles are an exception. “We took a leap of faith with the EQS sedan 18 months ago, and now the EQS SUV will also be produced in India to increase volumes,” he added.
Mercedes-Benz believes its electric car strategy is paying off. Electric vehicles accounted for 2.5% of its portfolio in 2023, a figure that rose to 5% in the first half of 2024. “We have six electric cars in our portfolio. Of the 9,000 cars sold in the first half of 2024, more than 500 were electric,” Iyer said.
Read also: Yamaha launches exclusive R15M and MT-15 version 2.0 of MotoGP Edition 2024 in India
The company plans to launch the EQG next year, though it is likely to be imported as a CBU. Iyer said Mercedes-Benz will continue to look for more localization opportunities to boost sales in India.
Overall, the company has achieved localization of over 30% of its model range in India. Sourcing from Indian suppliers for domestic and international plants has also increased annually. Iyer added that the company will review the new electric car manufacturing policy to determine whether it aligns with Mercedes-Benz’s long-term plans in India.
Disclaimer
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.