The German luxury brand is targeting 28-33 year-old buyers with the new EQA e-SUV.
To accelerate the adoption of electric vehicles, Mercedes Benz India is banking on the country’s younger customers with its all-new EQA SUV.
Targeted at a consumer demographic of 28-33 years, Mercedes expects many double-income families with an aggregate income of close to Rs 1 crore per annum to buy the new EQA. This will be amongst the youngest demographic that the maker of three-pointed stars is focusing on and Santosh Iyer, MD of Mercedes Benz India, says it was always clear that the companywould adopt a top-down strategy for EVs when it entered 2020.
“From a numerical perspective, the penetration of EVs has already doubled to 5% from last year. There is increased acceptance and awareness among the prospective customer base. With the EQA, we would like to accelerate the transition further,” said Iyer.
The company is relying on its financial arm, Mercedes Benz Financial Services, to offer prospective EQA buyers an assured buyback of 67% after four years when they upgrade to a new Mercedes vehicle. Thanks to its lower running cost, Mercedes Benz India claims first-time buyers who are conscious of price and value packaging will find the EQA with its Star Agility Finance package more attractive.
The company adds that compared to an internal combustion engine equivalent—i.e., GLA—through its Star Agility Program, an EQA buyer can save about Rs 80,000 per annum and about 2.4 lakhs in four years, along with the depreciation benefit. (This is considering an average down payment of Rs 14 lakh and monthly running of 2000 km).
The EQA has a claimed range of 560 kilometers, and the company says that a 30-minute charge would allow it to run 400 kilometers. On the charging infrastructure front, the company has partnered with the FICH App, which has over 1,000 charging stations mapped of various Charge Point Operators and an additional charging network of 150 stations.
Besides the youth, Mercedes Benz feels the EQA could be the second or third car in the family for its existing Merc owners to use it for their daily city errands.
“There is a growing shift towards sustainability, from the food you consume to the healthy lifestyle our buyers enjoy, and EQA fits very well with consumers with an income of about Rs 1 crore. They are entering the luxury car segment for the first time; they would like to stand out with a green number plate and a Mercedes Benz badge,” added Iyer.
Expanding choices
Mercedes Benz entered the premium electric vehicle market in 2020 with the EQC, and added the EQB and EQS with a local assembly. The company already has a portfolio of 3 electric vehicles, which will be doubled to 6 EVs by the end of the calendar year.
While the maker of three-pointed-star cars is the leader in the mainstream luxury car market, its rival BMW Group India has offered a stiff challenge to Merc in India’s emerging yet nascent electric vehicle segment.
While the Munich-based luxury car maker was India’s number one seller of luxury EVs in 2023, Mercedes Benz sold more EVs in Q1 of 2024 than its rival BMW. The company posted a growth of 130% in Q1 of 2024, with 350 vehicles sold and a penetration of 6%. While BMW has already sold over 2000 EVs in India, Mercedes-Benz, too, has seen its sales inch closer to that mark.
Transition to EVs – marathon not a sprint
The head of Mercedes Benz India said the shift towards zero-emission vehicles is a “marathon, as opposed to a sprint.” The company is taking all the fundamental measures to address prospective buyers’ “anxieties” rather than looking at volumes and sales targets.
Based on the customers’ feedback, Iyer said the customers expect a higher driving range with quick recharging time, especially for inter-city travel. With that in mind Mercedes India has opted to launch the lower powered 250+ variant which promises a greater driving range than the higher powered 350 with the 4matic AWD system. The 250+ EQA makes 190hp with a claimed range of 560 kms on the WLTP cycle, against the 350s’ 292hp and 438km range.
Given the younger buyer profile the company has also opted to equip the 250+ with a host of features that it says buyers in this age profile would appreciate. Thus features like the branded Burmeister audio system, extensive ambient lighting, a colour HUD and AR assisted navigation are all on offer. There’s also a full connectivity suite which offers the ability to precool or preheat the car along with ADAS capabilities that includes autonomous parking.
On course for a record year
Despite the slowdown in growth in the mainstream market, Mercedes-Benz India is confident of ending the year with record sales and double-digit growth. The company expects the strong momentum to continue with one new product lined up almost monthly.
Santosh Iyer, MD of Mercedes India, told Autocar Professional the company has had “an excellent first half” and is on track for double-digit growth. “We have had a great H1 and feel they should continue in H2. Q2 was a bit slower, but it was as expected because we had elections. Generally, the season has been low, so it’s not a surprise. But the good news here is that the inquiry levels have not dropped. There is still a lot of interest. Customers in our segment are traveling; once they are back, along with the wedding and festive season, we should see this demand going in,” added Iyer.
The company is also in a very peculiar situation with its best-selling car, the E Class, in a run-out phase, and the new gen comes in only in the later part of the year, which may affect volume. Yet, the company is confident it will grow at a healthy pace.
The head of Mercedes Benz says his most significant benchmark is GST collections, which indicates that consumption is growing. GDP is growing, and that will ensure the luxury car market sustains the growth momentum.
“The GST collections are growing monthly, and many transactions are happening in the economy. And there is growth there. So, suddenly, there is no change in macroeconomic factors that we must be bothered about. We have continuity in the government as well. So, in that sense, we expect the growth to continue,” assured Iyer.
The company has committed to 12 new launches in 2024; 6 have already been launched, and one new product will be launched monthly to sustain excitement and drive demand. “6 have happened in the first half; six will happen in the second half. Three of them are EVs, and one is a volume product,” added Iyer.
Top end vehicle growing strong
Like the mainstream car market, the entry-level luxury segment witnessed a softening in demand from April to June in the second quarter of 2024, leading to discounts. Iyer agrees that the discounts exist but says Mercedes Benz won’t participate. “We won’t participate (in discounts) for sure. But I think it’s also more of a seasonal impact, coupled with elections and other issues. But when I talk about my core or top-end segment, we see fantastic growth even in quarter 2,” added Iyer.
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