Mercedes may shift investments to other countries: Folger - Hindustan Times
close_game
close_game

Mercedes may shift investments to other countries: Folger

Hindustan Times | By, New Delhi
May 19, 2016 11:23 AM IST

The ban of diesel vehicles in the national capital region above engine capacity of two litres has forced German luxury car maker Mercedes-Benz to relook at its India strategy. India might lose some of its investments that Mercedes has year-marked for its expansion in the country.

The ban of diesel vehicles in the national capital region above engine capacity of two litres has forced German luxury car maker Mercedes-Benz to relook at its India strategy. India might lose some of its investments that Mercedes has year-marked for its expansion in the country.

Roland Folger, managing director and CEO of Mercedes Benz India, poses with the S500 Mercedes Benz car at the Indian Auto Expo 2016.(AFP)
Roland Folger, managing director and CEO of Mercedes Benz India, poses with the S500 Mercedes Benz car at the Indian Auto Expo 2016.(AFP)

“For a company acting globally, there is always a choice to shift to other countries like Russia or Brazil,” said Roland S. Folger, managing director and CEO of Mercedes-Benz India.

Hindustan Times - your fastest source for breaking news! Read now.

Though some of his colleagues at Mercedes have raised this as a concern, Folger still hopes that by mid-2016 the government will lift the ban. Till then a large chunk of the company’s investments are on hold. “We are forced to stop some of our investments in India, which were based on opportunity that a market has… All these have caused delay in decision making, which isn’t good,” he said.

NCR is close to 20-25% of Mercedes’ domestic volumes, and diesel makes for 80-85% of that. If the ban continues, Folger’s biggest concern is that it won’t be able to achieve the volumes it was targeting.

Unlike in most developed markets, including China, luxury cars make for 5-8% of total car sales. In India it is just over 1%.

The diesel ban has only made things worse, also affecting dealers. “Dealers’ business has come down by 30-50%. With a high load of petrol vehicles there is at least something to sell,” Folger said, who said that the ban is a “lost opportunity”.

Mercedes has witnessed more inquiry of petrol vehicles, but Folger said that hasn’t translated to sales. He added that contrary to what the government and the Supreme Court thinks, the new diesel engines emit 25% less CO2 than petrol cars, and once the BS-VI regime starts the diesel engine will be as efficient as the petrol ones.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Sunny Sen was part of Hindustan Times’ nationwide network of correspondents that brings news, analysis and information to its readers. He no longer works with the Hindustan Times.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On