In recent years, foreign luxury brands prefer to invest in the construction of automobile production lines in India, and I believe that everyone is not uncommon. From the earliest Mercedes-Benz S-Class produced in India through CKD (disassembly assembly) methods, to the later Lexus announced the announcement of investing 100 million US dollars to build a factory in India, these news, every time can cause an uproar inside and outside the industry.
More recently, Martin Schwenk, head of Mercedes-Benz's India business, said that Mercedes-Benz plans to start assembling the brand's pure electric flagship sedan, EQS, in India this year, and expects to start selling locally produced EQS in India in the fourth quarter of this year. As soon as this news comes out, it means that Mercedes-Benz will become the world's first luxury brand to assemble electric vehicles in India.
On why luxury brands frequently associate with India, like the reason for investing in local factories, it is estimated that everyone has more or less understood some, here Xiaobian to give you a brief review, there are mainly the following three reasons.
The first is India's high auto import tariffs. To quote Musk's original words: "India's auto import tariffs are the highest in the world", how exaggerated is it? Models priced under $40,000 are subject to a 60 percent tariff, and over $40,000 are subject to a 100 percent tariff, plus a 28 percent federal goods and services tax. Therefore, for luxury brands such as Mercedes-Benz, if they want to have sales of their luxury cars in India, building a factory is a necessary condition.
The second is the potential of The luxury car market in India. Although the gap between rich and poor in India is large, we cannot ignore its development potential as one of the world's top economies, coupled with India's low labor costs, even if the "three brothers" of Luxury Cars produced in India do not buy, these luxury brands can export assembled cars to Some mainstream automobile consumer markets such as Southeast Asia and even China, and they can also make a lot of money.
Finally, luxury brands have fewer restrictions on building factories in India, the most obvious is that without the constraints of joint venture partners, they can take 100% of the profits and fully control the right to speak in the enterprise (here refer to Beijing Benz and BMW Brilliance). At the same time, the CDK production model they use in India, that is, "disassembly and assemble", is an import model of full bulk parts, most of which are still from abroad, ensuring the rights and interests of workers in the country of origin of the brand, while Indian workers only do some simple assembly processes, and the quality is generally guaranteed.
Of course, there is another very obscure reason for these luxury brands to build factories in India, that is, considering the "face" problem of Chinese consumers, the most intuitive example is Lexus. The reason why Chinese consumers pursue Lexus, in addition to the reliability of its own product quality and good user reputation, the whole series of models have maintained the "import halo", "craftsman spirit" and other labels of the thunder car, in the eyes of the good face of the Chinese people is naturally a fragrant feast, after all, the word "import car" is more than Beijing Mercedes-Benz, Brilliance BMW and other introductions to be more forced.
In fact, after talking so much, the above statement is also based on the background of the era of traditional fuel vehicles, and these luxury brands use CDK to produce luxury cars in India, but don't forget that "Mercedes-Benz will become the world's first luxury brand to assemble electric vehicles in India" mentioned earlier, which is very confusing and confusing.
The Indian government does have a strong effort to promote the popularization of electric vehicles in India, but the "electric vehicle" here refers to two-wheeled, not what we often call electric vehicles, according to indian media statistics, electric vehicles currently account for only 4% of the share of the Indian electric vehicle market (including two-wheeled, three-wheeled and electric vehicles), and the total number of electric vehicles running on the market is 877,000 units (as of November 2021).
Therefore, what I want to say here is that India currently has no potential to develop pure electric models, far less than the booming Chinese new energy vehicle market. According to the person in charge of Mercedes-Benz India, their goal in the short term is to improve the annual sales of EQS to three digits, and it is really difficult to hear this number, please ask Mercedes-Benz, do you bother to invest in the production line of EQS in India, in order to achieve these three-digit annual sales?
The result is obvious, although Mercedes-Benz is explicitly saying that the investment in the construction of EQS production lines in India is due to India's high tariffs and considering the consumption potential of the Indian new energy vehicle market. So after meeting the local demand for Mercedes-Benz EQS in India, where the new cars produced will eventually be sold, everyone knows it, after all, the starting price of EQS in China (1.0796 million) can be more expensive than the "big brother" Mercedes-Benz S-Class (917,800) to sell more expensive!
To know that China has the world's most perfect electric vehicle supply chain, and Mercedes-Benz is trying its best to detour to India to build a production line, and then seek to sell cars at a high price in China as an import, so for this wave of operations of Mercedes-Benz, Xiaobian can only use an old saying to describe "being a bitch again, and wanting to set up a archway", do you think it is appropriate?