Business & Investment

Mercedes-Benz India has received an injection of Rs 1,750 from parent Daimler to negotiate a pandemic turmoil

Daimler AG, German parents Mercedes Benz IndiaLast month, it injected Rs 1,750 into the unit to help luxury car makers negotiate the turmoil caused by the pandemic. According to industry experts, this money could be used to expand its sales footprint and product range, as well as to repay debt in Mercedes’ local operations.

India’s largest luxury car maker sold 7,893 units in 2020, below 2013 sales and about half of 2018’s peak sales. The overall luxury car market has fallen from its peak of around 41,000 in 2018 to around 19,000. In 2020, the unit will overturn the business forecast of luxury car makers.

In such a scenario, the promoter said he might have been required to inject capital into the company to meet the contract with the lender. Ravi Batia, President of Jato Dynamics, an automotive business intelligence company.

“Luxury carmakers’ sales volume and revenue growth weren’t in line with planned expectations and they had to fulfill their contracts, which could have required additional cash injections into their businesses,” said Batia. Mr. says.

Mercedes Benz IndiaWhile confirming the investment by the German parent company.

“Daimler AG is investing capital as part of its commitment to the Indian market to drive the robustness and flexibility of its business in India,” a spokeswoman for the company said in an email to an ET question. Said in the answer. “The inflow of funds is used for general corporate financing.”

The company plans to launch 15 new and updated models in the country in 2021, which is expected to increase sales by more than 40% over the next two years, with annual peak sales of more than 15,500 units. Recover to.

“The core customers of luxury car makers are relatively unaffected by the pandemic, and this segment could return to pre-Covid sales levels in the next few years,” said Gaurav Vangaal, Associate Director of Light Vehicle Production. Stated. Prediction, Indian subcontinent, IHS Markit.

However, according to Jato Dynamics’ analysis, the outlook for luxury car makers is fairly cautious, and it could take up to 2027 to return to pre-pandemic levels. The situation is exacerbated as the global semiconductor shortage continues and begins to affect production lines around the world.



Mercedes-Benz India has received an injection of Rs 1,750 from parent Daimler to negotiate a pandemic turmoil

https://economictimes.indiatimes.com/markets/stocks/news/mercedes-benz-india-receives-rs-1750-crore-fund-infusion-from-parent-daimler-to-negotiate-pandemic-disruptions/articleshow/80451881.cms Mercedes-Benz India has received an injection of Rs 1,750 from parent Daimler to negotiate a pandemic turmoil

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