At 18,123 units sold, the luxury car maker has clocked the highest-ever financial year sales in its 30 years of Indian operations. Lance Bennett, vice president, sales & marketing explains how.
Mercedes-Benz recently announced that it has clocked the highest-ever monthly, quarterly and financial year sales in its 30 years of Indian operations. The luxury car maker sold 18,123 units in FY 2023-24 and delivered 5,412 new vehicles to customers in the January- March 2024 period, recording 15% y-o-y sales growth.
In an interview with afaqs!, Lance Bennett, vice president, sales & marketing, Mercedes-Benz India, says these numbers have been accomplished on the back of a strong demand for its cars, effective marketing, customised products for the Indian market and managing inventory to prevent long waits.
“This comprehensive approach, coupled with the strong brand affinity in India, contributes to our success,” he says.
While Bennett does not attribute the company’s success to any particular marketing campaign, he speaks about some of the marketing initiatives of the past year.
In June 2023, to promote the launch of the AMG SL 55 4MATIC+, Mercedes-Benz organised a grand event at the NMACC, featuring a parade of vintage SL cars loaned to it by their owners. Amongst them was an iconic car from Bollywood lore, the one that drove Akash, Sameer and Sid to Goa in Dil Chahta Hai. A team tracked the Blue 300SL for a couple of months and eventually managed to find it, only to realise that it was now painted red. It was then repainted and restored back to its former flirt to display at the event.
“It was a poignant experience to see these cherished classics up close, appreciating their craftsmanship and design, which still influence our current models. Despite being a niche product, the SL holds significant brand value for us. It exemplifies our commitment to crafting aspirational products that elevate our brand,” Bennett, who took over the role in February 2023, says.
The show was also broadcast live across multiple social media platforms and it garnered significant attention, with nearly 300,000 viewers. Following this, it hosted exclusive SL private nights at top venues nationwide, inviting customers to join them. The marketing efforts continued with digital banners and videos in airports, strategically placing the car to maintain its aspirational appeal. This campaign was unique to the Indian market.
Similarly, Mercedes-Benz is implementing several such unique strategies for the Indian market, while also replicating some from the global markets. It is focused on having big customer relationship management (CRM) activities. For example, it has a tie-up with NMACC and it offers its customers exclusive experiences like attending shows at the NMACC theatre.
Additionally, it is enhancing the luxury experience in its dealerships with the MAR20X experience centre. These luxury dealerships, with state-of-the-art service facilities, are coming up in key customer hubs of New Delhi and Mumbai. Mercedes-Benz will also debut in 10 new cities, like Jammu, Kannur, Kottayam, Udaipur, Amritsar, Agra, Valsad, Patna, with luxury MAR 20 workshops. 25 existing facilities will also soon transform into international MAR 20X standards.
It is also pioneering customer engagement with technologies, integrated into its Salesforce Marketing Cloud. It is transitioning to the ‘Retail of the Future’ (ROTF) model or the agency model, where it sells cars directly to the customers. It was launched in June 2021, making India the fourth market to roll out ROTF, after South Africa, Sweden and Austria.
“This positions us as innovators, offering nationwide stock access and a premium purchasing experience with transparent pricing. This approach distinguishes us in the market and enhances the customer journey,” he adds.
While Mercedes-Benz India earlier aimed to shift 90% of its ad spends to digital by 2024, the brand’s preferred medium is on-ground events, followed by print. “Our approach varies depending on the messaging, whether it’s a retail or brand campaign. While we’re still somewhat heavier on print than expected, we remain flexible and adjust based on quarterly activities,” he says.
Comparing India with the global market, Bennett, who has worked in New Zealand, the USA and Australia, points out one notable distinction- the preference for print newspapers among Indian consumers, compared to digital news in other regions. “We still like to find a balance between traditional print and digital mediums, with a heavier focus on digital. Despite the global trend away from print, India still values it alongside out-of-home advertising like billboards,” he says.
Additionally, he says, selecting hoarding locations for billboards can be more challenging due to more clutter and greater billboard presence in India as compared to other markets he has previously worked in. “However, Indian consumers are still tech-savvy, engaging heavily with digital forums and social media, which we actively invest in.”
Just as the medium, the Indian TG is also different. Mercedes-Benz has observed a steady decline in the average age of its buyers, reflecting a younger demographic compared to other markets globally. The average age across portfolios is around 38 years. However, luxury carmakers across brands have noted this trend. With rising income levels, many younger professionals are opting for high-end automobiles.
There is also an increase in female purchasers. Currently, approximately 15% of its buyers are female. Recognising this trend, it has tailored its marketing efforts towards female consumers, acknowledging their influence in family purchases. Although its marketing isn’t specifically targeted at women, it celebrates women’s contributions through initiatives like its Women’s Day campaign.
“While our marketing approach remains gender-neutral to appeal to both male and female buyers, we prioritise diversity within our organisation. By fostering a diverse workforce, we encourage diverse thinking. Approximately 50% of our new hires are now females, ensuring representation throughout our organisation,” he says.
The automobile company has exhibited consistent performance across segments- Entry, Core Luxury, and Top End Vehicles (TEV). The entry segment comprising A-Class sedan and GLA SUV was able to register a strong presence with a sales contribution of 15%. The ‘Core Segment’ comprising the C-Class, LWB E-Class sedans and the GLC and GLE SUVs contributed 60%. The TEV segment also continued to command 25% of Mercedes-Benz’s overall sales in India. This reiterates the continued customer preference for top-end luxury and exclusive vehicles like the GLS, S-Class, Mercedes-Maybach, the EQS, G-Class and the AMG range.
Buoyed by this growth, it has planned nine new launches in 2024, including three Battery Electric Vehicles (BEVs), doubling its electric range. In Q1 2024, the BEV portfolio grew by 130% y-o-y and penetration increased more than 6%.
In Q2 2024, there will also be four new TEVs. “These new segments fill gaps in our current lineup. For example, this quarter we have launched top-end vehicles like the AMG C 63 and AMG S 63. It is another high-performance luxury limousine, addressing niches we haven’t tapped before,” he explains.
Mercedes-Benz will also be creating an ‘AMG Speed City’ for enthusiasts to hone their performance car driving skills, test the latest AMGs under expert guidance, and enjoy an immersive AMG brand experience. The upcoming launches will be organised here, hosting customers in a bespoke luxury setting. It will give customers firsthand experience on tracks or airfields. “Our team of driving specialists, ex-race drivers and current race drivers come over from Germany to ensure an exciting, memorable experience for all attendees,” he says.
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