LWB E-class not an easy sell to HQ: Merc India CEO

Mercedes has created a new sub-segment in India with the newest addition to its portfolio: the long-wheelbase E-class. The German carmaker has a lot riding on it since the introduction of the sedan for our right-hand-drive (RHD) market has entailed a big investment.

India and China are the only two markets where the LWB version is sold, but since Chinese cars are left-hand drive, the carmaker has had to engineer a RHD version solely for our market. Besides, the carmaker found out that the market for the long wheelbase sedan wasn’t sizeable in other countries. In fact, due to the rising cost pressure, the carmaker faced a challenge in proposing the idea to its headquarters in Germany.

“It was not an easy sell to Germany because India was going to be the only country in the world to sell the LWB E-class in right-hand drive. Thus, all the costs related to homologation and crash testing in Germany are not distributed over a range of say 1,00,000 vehicles; they are borne by us in India. The same, naturally, puts a lot more strain on our volume planning,” Roland Folger, managing director and CEO, Mercedes-Benz India, told Autocar India on the sidelines of the launch in Mumbai.

With over 34 percent of its total sales coming from the E-class line-up itself, the volumes just about justified the introduction of the long-wheelbase sedan. However, splitting the sales volume by offering the choice of the regular wheelbase (available globally) and long-wheelbase would render the exercise unprofitable.

So what sealed the deal for the decision to finally go ahead with the long-wheelbase for India? “I think Germany understands that India has a significant potential for growth in the luxury car segment. And while the overall share of luxury segment among the car market in India is still relatively small, we have a market share of roughly 45 percent. So naturally it makes sense to invest in specific vehicles,” said Folger.

The carmaker is also counting on the unique positioning that the LWB E-class brings with itself in the luxury car market in India, along with the preference for chauffeur-driven vehicles to drive volumes for the new E-class.