Witnessing the growing sales records of 2024 Mercedes has decided to add another 20 dealerships or service outlets in India. While the German manufacturer previously operated trough their establishment in the Tier one cities, now they are targeting smaller cities where new business owner and entrepreneurs are paving their way to high class indulgence and luxury.

The brand considers India’s rapid economic growth to be the undercurrent of the change in companies perspective. Plus the fundamental shift in the choices of the working youngsters differs from that of the elder generations who were more concerned with savings and investments.

“Now the second and third generation have taken over the family business and these guys have studied abroad, come back and are able to consume without guilt. It is not only cars, but even watches and other luxury,” Santosh Iyer, CEO of Mercedes-Benz India, told Reuters.

The trend of increasing consumption of new working professionals has led the German brand to seek newer ground ahead of mega cities such as Delhi and Mumbai.

In smaller towns like Kanpur in central India which has a population of about 3 million and Patna in the east with a population of over 2 million, demand for its top-end cars and electric models is higher than entry-level models, said Iyer.

Expansion In Tier Two Cities

As per the officials at Mercedes the brand would first focus on improving a service center matrix in these cities before opening full fledged dealership’s.

Mercedes has gained the top position of being the Best selling -luxury car manufacturer in India, they posted a record sales of around 19,500 vehicles last year. The number showcases a 12% rise in the sales of the vehicles sold than the last year. As per Mercedes the publicity of new car launches as well as a profound electric portfolio has helped the brand reach such a number of sales. Beyond that Mercedes has reported that the sales of their Electric models have doubled over the same period as well.

Plans Ahead

The company further plans to introduce 8 new car models in India, which would include EV’s in 2025. The new launches would be a integral step of the overall aim to expand in India . The undercurrent for such initiatives have been the increasing sales. Beyond Mercedes, BMW which is as of yet the second Luxury car manufacturer in India also recorded high sales of around 16,000 vehicles as well.

Luxury vehicles account for a meek 1% of India’s annual car sales of around 4 million units that are sold all over India. But Luxury brands consider their stakes to be growing at a faster rate and hence they want to invest further in the market.

High-End Models Are The Major Sales Motivator

As per Mercedes High end models priced over the value of $175,000 make up about quarter of the total sales they have witnessed in India. Hence the average price of Mercedes car in India has climbed to Rs 9.5 million Rupees in 2024. This is a change from the novel figure of 8.9 million Rupees a year ago, the company reported.

Mercedes And EV’s

Mercedes has reported that they have seen better sales numbers for their EV lineup in smaller cities. As per Iyer This is because that the customer subset Mercedes wants to attract live in stand alone homes, which have sufficient space to charge EV’s.

“Major cities like Mumbai and Delhi account for 80% of Mercedes’ total sales and in markets like these luxury vehicles account for 2-3% of total car sales” Iyer said

In smaller towns, the proportion is about 1.1% which leaves more room for growth.

“Top-end cars continue to grow and outgrow entry and core segments also. These are promising signs on the changing structure of the market,” he said.

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