Q: With the new retail strategy, what’s its likely impact on Mercedes-Benz India’s profitability?
First, with franchise partners. The new car business has always been volatile. There were big swings. Some years are a little profitable, some not. It’s different for different dealerships. Overall, we have seen instability of profitability in the new car business. The service business has always been reasonably profitable though.
What we believe is that we’ll have a consistent positive business in the new car sales for our franchise partners going forward. How much profitability, time will tell that, but we have done simulations based on actual cost, and shared and discussed with all our partners collectively and individually. They have looked into that, and they are all for the new model. So, I presume that they trust that this is changing profitability for the better.
It might not