The sales of Mercedes-Benz cars in India have taken a hit recently due to the public’s preference to invest in systematic investment plans (SIP), according to the sales and marketing head for the company’s operations in the country. Santosh Iyer told Times of India that the luxury car market was deeply impacted by the COVID-19 pandemic and people are looking at relatively safer investments.
“While the luxury car industry is growing at one of its fastest paces post-pandemic, actual sales are a far cry from potential and wealth that India carries,” Iyer said in the interview.
Iyer also explained that the average consumer is currently looking for a dip in the market to increase their investments in SIPs and as a result, luxury cars have lost their value as an asset.
“Disposable incomes into aspirational and premium products such as cars are not as widespread as they should be. While there are 15,000 people inquiring about luxury cars every month, the actual order size is about 1500 units. So, there are still 13,500 customers who desire to own a Mercedes-Benz, but postpone their purchase thinking that its fine, maybe, I should continue (with) my SIP or maybe the next dip (in markets) is there,” he added.
According to the data published by Association of Mutual Funds in India (AMFI), there are around 59.3 million SIP accounts in India. “They (SIPs) are our competitors, I tell my team if you are able to break that (SIP investment) cycle, then exponential growth is a given,” Iyer concluded.
The response from Iyer has sparked a lot of conversations on social media with many users making fun of the statement and suggesting that Mercedes is unable to understand their customer base.