Mercedes-Benz to continue investing in 'priority market' India: Co Executive

Munich, Sep 9 (PTI) Mercedes-Benz will continue investing in the 'priority market' India, without putting on hold any of its plans, including to bolster local production, in the wake of impending EU-India free trade agreement, according to a top company executive.

Terming India a high growth market, Member of the Board of Management of Mercedes-Benz Group AG Mathias Geisen noted that the company has envisioned multiple scenarios keeping in mind the possible outcome of the trade agreement.

"We haven't put any plans on hold compared to what we have originally," Geisen said here on the sidelines of IAA Mobility show.

He was replying to query whether the German luxury carmaker looks to put certain plans like investing more on CKD facilities for certain models on hold in India until clarity emerges on the final framework of the EU-India FTA.

"I mean, of course, we have different scenarios, like, we always work with, and some of the scenarios, of course, including this topic. And accordingly, we have plans, but that really depends finally on how the regulations will turn out," Geisen stated.

"We in general believe in free trade..it is always something which helps, and we believe that this also pushes the economy absolutely," he added.

The European Union is India's biggest trade partner with bilateral trade in goods recording USD 135 billion in financial year 2023-24.

India and the European Union will hold two rounds of crucial negotiations in next one month to overcome differences in areas of rules of origin, market access and duties on wine and dairy products.

The 13th round of negotiations for the FTA will be held in New Delhi and the next round has been slated for early October in Brussels.

The two sides have already concluded negotiations on 11 chapters that included customs and trade facilitation, dispute settlement, digital trade, sustainable food system, small and medium-sized enterprises, competition and subsidies and capital movements.

Negotiations on several key chapters including rules of origin and market access are yet to be concluded.

Geisen said India remains a priority and growth market for the German luxury carmaker.

"We have our own product facility in India, so that's a very, very important growth market. And we also believe with the products we have in the pipeline, we can address this market pretty well. And we always look into where localisation makes sense and where not. And India is definitely on our priority list," he noted.

A leader in the Indian luxury car segment, the company reported sales of 19,565 units last year, its best ever annual performance till date in the country.

Geisen said the Indian market is getting tougher with other OEMs also realising the country's long-term growth potential.

"We are leading, which is nice, but it's also getting tougher and tougher. And of course, not only us, but also other OEMs realise that India will be a market with a strong growth, not only potential, but with a real growth, and investing more and more in CKD production, etc," he said.

"Everyone now looks at what happens if China is not as big as it was before as a sales market," he added.

The luxury carmaker believes that it is definitely a market which will grow going forward.

To a query regarding diesel powertrains, Geisen stated that the company has no plans to discontinue the engines.

On slowdown in EV sales across markets, he noted that it is incredibly difficult to predict as how customers decide.

"..it is so regionally driven, so incredibly different, region by region, driven by infrastructure, by regulations, by incentives, etc, that we will not predict any numbers any longer," he said.

"We'll make sure we have a strategy with which we can address all different scenarios possible when it comes to the pickup of electric mobility. And that's what we've done with our approach. So we have full flexibility in production," he added.

The company has also updated its internal combustion engines to EU 7 emission regulations, he said.

"Our ambition is to lead whatever we offer in whichever segment we compete, that's clear..be it combustion, be it electric, if we compete in the segment, we want to offer the best product," Geisen stated. PTI MSS ANU