Mercedes expects flat sales in 2016 after demonetisation

NEW DELHI: Mercedes-Benz has been very aggressive in its growth strategy in India for 2016. The carmaker has released 12 models so far in the year alone, with the latest one being the Mercedes-Benz CLA entry-level premium sedan. The launch event of the 2017 Mercedes-Benz CLA facelift saw the company announce a 13th model set to be unveiled before the end of the year. Despite its momentum in the market, Mercedes-Benz also appears to have been hit by the Indian government’s demonetisation move. In a recent press release, the luxury car manufacturer said that it has lowered its sales growth target in India for 2016.

Instead of expecting double-digit sales growth in India, Mercedes-Benz now expects little to no growth for the year. It sold 13,502 units in the previous year, and added that it is still optimistic for the coming year. The company expects double-digit sales growth for 2017. Roland Folger, Managing Director and CEO for Mercedes Benz India, told reporters, “In October, when we came out of the diesel ban in Delhi-NCR, we were still looking for double-digit growth in sales from last year, but demonetisation has had an impact. We will be lucky if we do the same number as last year.”

Despite the grim news, Folger affirmed his support for the demonetisation move, saying that it will be beneficial in the long term. He described 2016 as a year of challenges, surprises and lost opportunities, and stated his hope that the next year will be better for the industry as a whole.

“This will be a flat year for the luxury car industry in India. However, the next year should be better. We believe that the customers are only postponing their purchases and they’ll come back next year,” he said. As for a specific sales target for 2017, Folger said that the Mercedes-Benz always aims for double-digit growth, as long as there are no disruptive moves. He was positive about the mid-term and long-term future for the Indian automotive market.

“The market has been steady for a long time and disruptive changes like demonetisation and GST lay down the foundation for long-term growth,” Folger said. The company has also opened its 89th outlet and a new showroom in the capital region today.