German luxury carmaker Mercedes-Benz is confident of putting up a better performance this year in India despite the severe second wave of COVID-19, banking on learnings from last year’s first wave and more confidence in its customer base, according to a senior company official.
Having addressed the supply chain issues that plagued it last year, Mercedes-Benz India is also sticking to its original plan to bring 15 new products in the market this year despite the launch of its SUV GLA delayed by almost a month due to fresh surge in COVID-19 cases in April.
“We learnt something in the first wave. We could see how quick the economic recovery was. Yes, the first wave was not as heavy as the second wave but it took only four to six weeks from the peak to a good fourth quarter. Now of course the situation is worse but there is more confidence in the businesses on how to manage it,” Mercedes-Benz India Managing Director & CEO Martin Schwenk told PTI.
He further said,”If I look from a manufacturer’s point of view, we have also done a lot last year on how to manage. We have also seen that good and strong products help to come back.”
Schwenk was responding to a query on if the company is confident of a better performance in 2021 compared to last year when its sales were down 43 per cent at 7,893 units.
“There is also a substantial order bank from last year and we will try to fulfill these orders and that will also bring the volumes, assuming that we don’t have heavier lockdowns…but as per our current plan I am confident that we will sell quite a bit more cars than the year before,” he said.
Bullish on the market bouncing back by around July provided the pandemic doesn’t get worse, he said,”What we really see is the confidence levels are actually better than in the first wave. We would think there is a lot of pent-up demand as well. We have quite a strong order bank and that’s a positive thing. We believe as soon as restrictions are reduced and situations improve business will come back relatively quickly.”
The company’s dealers are also more confident, as customers who are mostly ‘business people’ have also learnt how to deal with the health crisis despite COVID-19 coming much closer at the personal front of many, he added.
“They are more confident of how they come back into the business. There is already experience of dealing with it (COVID). On the one hand managing the acute crisis and on the other, coming out of the crisis and then stabilising the business again. Most businesses made relatively stable returns last year after the first wave. That gives our customer base, dealer base confidence,” Schwenk said.
Add to that, he said the overall economic indicators are looking to be stable despite the severity of the second wave.
“If you look at the GDP you don’t see the brutal breakdown we had last year, you see incredible adjustment for every additional week of lockdown. There is no (indicator) that the economic activity will falter completely,” he said.
Asked if the company has been able to address supply chain issues, he replied in the affirmative and said what hampered last year was the support Mercedes-Benz India needed from the headquarters to bring experts to prepare for production of GLA in India due to travel restrictions.
“After the first wave subsided, we could bring the colleagues we needed for the ramp up. That was one of the biggest bottlenecks. On the other hand as we are in CKD (completely knocked down) production, we now have the supply for the next coming months. They are either here in India or are in ships on the way. So we don’t have a real supply issue in that sense,” he added.
On whether the second wave of the pandemic has forced the company to change its original plans to launch 15 products in India, like the GLA has been delayed, Schwenk said,”Honestly, we will roll out as we have planned.”
He further said,”I believe we have a chance to come back. We learnt in the first part of the crisis how to manage everything, from the employee side of safety and protection, we had complete lockdown and we didn’t have any production. Now we are producing, of course, less than 50 per cent of capacity but we are still producing.”
Mercedes-Benz India has so far launched 6 products out of the 15 planned for this year.
