By Aditi Shah
NEW DELHI (Reuters) – Mercedes-Benz is seeing an increase in Indian buyers opting for electric cars as their first luxury vehicle, its country-based managing director told Reuters, a trend that is helping to boost sales for the German car maker.
Luxury car sales are surging in India, with market leader Mercedes posting record sales. In the first six months of 2024, Mercedes sold 9,300 cars in India, 5% of which were electric, doubling EV penetration from 2.5% last year.
Mercedes’ Santosh Iyer said after the launch of the seven-seater electric EQS 580 SUV, priced at about $168,200, that more young Mercedes buyers are turning to EVs to “differentiate themselves”.
“Most of them are opinion leaders in their own small target groups — doctors, lawyers, architects — so they want to demonstrate that they have made the transition first,” Iyer said, adding that the group is small but growing.
Iyer said about 15% of Mercedes’ EVs sold in India this year were to first-time luxury buyers, up from 5% in 2023, helped by the launch of a new electric SUV.
India’s EV market is small but growing: Electric vehicles accounted for about 2% of the 4.2 million cars sold in the country last year, and the government wants to increase that to 30% by 2030.
Mercedes, which announced a new investment of $24 million in India in January, sells 18 internal combustion engine vehicles and six EVs in the country.
The German carmaker began assembling EVs in India in 2022 instead of importing finished products that are subject to as much as 100% customs duty, and the EQS SUV will be the company’s second EV to be assembled locally.
“We are taking the transition to EVs seriously and are pushing this forward strongly by increasing local production rather than just importing products,” he said.
The high price of EVs compared to gasoline-powered cars and the uncertainty of their resale value remain deterrents for many buyers.
(Reporting by Aditi Shah and David Evans Editing)
