Uncertainty over diesel cars impacted plans: Mercedes chief

Managing Director & CEO of Mercedes Benz India, Roland Folger
The ban on registration of diesel vehicles in Delhi and the lack of clarity on how the goods and services tax rollout will impact vehicle prices have affected Mercedes-Benz's overall planning in India, its managing director and chief executive Roland Folger said here on Monday.

At the launch of the second Mercedes-Benz dealership in Hyderabad, Folger said the company's sales growth in calendar year 2016 would be more or less flat. However, he said it's hard to predict the likely trend in the next year owing to the current uncertainties. The luxury car firm sold nearly 10,000 units during the three quarters between January and September 2016 while its sports utility vehicle (SUV) portfolio stood out by posting a 45 per cent growth in the third quarter thanks to the launch of the locally built GLC SUV in September.

Folger added the launch of petrol variants of all Mercedes models in India was to address the uncertainty over the demand of diesel vehicles, though there was no drastic shift in terms of sale of diesel and petrol variants.

He said the company would launch cars compliant with BS-V1 emission norms in 2018 if upgraded diesel is available in India by then. This would put an end to the difference in emissions between diesel and petrol cars, he added.

Folger said some customers believe the GST rollout would increase vehicle prices while others think the prices would come down thanks to GST.

According to him, the company is ready to handle any kind of upside in demand for cars and that its India plant has sufficient capacities to augment production.

"The existing annual manufacturing capacity of 20,000 units can even be doubled to 40,000 by introducing a second shift if demand rises. Lower tax rates will be helpful for the economy as well as for the success of Make In India programme," he added.

Mercedes-Benz would launch the remaining four of its 12 models it plans to release in the current calendar year, he noted.

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