One out of every four cars that Mercedes-Benz sold in India in the financial year 2023-24 was a top-end vehicle — cars costing upwards of ₹1.5 crore.

Sales of these top-end vehicles were driven by the German carmaker's financial services arm, Mercedes Benz Financial Services India. "One of the catalysts is our financial services arm, Mercedes Benz Financial Services. Today their portfolio stands at around ₹8,000 crore. One in two Mercedes-Benz cars is financed by MBFS," says Santosh Iyer, managing director & CEO, Mercedes-Benz India.

The non-banking financial company (NBFC) offers the Star Agility financing option under which customers pay an upfront deposit and about 36 EMI payments. At the end of the contract period, the customer can choose to buy the vehicle at the residual value, continue to finance it or return it. The company also takes care of servicing and offers extended warranty under the scheme.

"This shows the changing ownership pattern in India. The customers are opting for new-age financing solutions, a trend that is helping fuel luxury car sales," says Iyer.

Mercedes-Benz clocked its highest-ever sales in India in the March quarter. The carmaker plans to launch nine new vehicles in 2024, comprising three battery electric vehicles, and four new TEVs (Top End Vehicles).

"India is slowly but surely transitioning towards electric mobility. It is a marathon and not a sprint," says Iyer.

Mercedes-Benz BEV portfolio clocked a 130% year-on-year growth in Q1 2024 with a strong response to the EQE SUV. The penetration of the BEV portfolio grew more than 6% from earlier 4% in Q1 2024. Mercedes-Benz plans to debut three new BEVs in the remaining quarter of 2024, doubling its BEV portfolio to 6 BEVs by the end of 2024.

Mercedes-Benz sold out its top-selling sedan much earlier than earlier expected. Customer demand for the long-wheelbase E-Class sedan has surpassed the company's expectations, says Iyer.

“In Q1, we are down to the last units of our best-selling luxury sedan in India. This poses some challenges for us because the new E class will come only at the end of the year. We may have a period where we don’t have our best-selling car,” he says.

Around 60% of sales last year came from SUVs, says Iyer.

The carmaker delivered a record 5,412 new Mercedes-Benz vehicles to customers in the January- March 2024 period, recording a 15% y-o-y sales growth. Mercedes-Benz also recorded its highest fiscal sales ever in India, with 18,123 units sold in FY24, up 10% y-o-y.

This was aided by the consistent performance from across the Entry, Core Luxury and TEV segments of the company. The entry segment comprising A-Class sedan and GLA SUV was able to register a strong presence with sales contribution of 15%. The ‘Core Segment’ comprising the C-Class, LWB E-Class sedans and the GLC and GLE SUVs contributed a significant 60%, to the overall sales volumes of Mercedes-Benz in Q1 2024.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.