- Luxury car sales slow because of people doing SIPs, says Mercedes CEO: Does this make sense?Luxury car sales slow bec…
Luxury car sales slow because of people doing SIPs, says Mercedes CEO: Does this make sense?
Published: December 1, 2022
Recently, Santosh Iyer, Mercedes-Benz India’s sales and marketing head recently made a statement where he said that SIP investments are a competition to luxury cars sales and it is hindering the growth of the luxury car industry in India. Is this true? After the statement made by Santosh Iyer had gone public, Zerodha CEO Nithin Kamath had weighed in and shared his thoughts now.
A saving mindset is what will help us in times like now when countries that have borrowed heavily are getting screwed? In a world of rising interest rates, this will probably get much worse before it gets better for them. 1/2
— Nithin Kamath (@Nithin0dha)
Nithin Kamath in a post on Twitter wrote, “A saving mindset is what will help us in times like now when countries that have borrowed heavily are getting screwed? In a world of rising interest rates, this will probably get much worse before it gets better for them.” He said, saving mindset among Indians is going to help them at a time when the rising interest rates is going to completely destroy the economies. Other than this, Nithin Kamath also wrote, “Isn’t slow & steady growth much better (like compounding in investing) than debt-fuelled explosive growth where people borrow to buy depreciating assets? Neither good for customers nor for businesses in the long run. Btw, I hope this is a misquote & is not what it reads.”
Ever since the Iyer’s statement has gone public, it has been receiving reactions from many people. Nilesh Shah, Managing Director, Kotak Mahindra AMC also responded in the same matter. Nilesh also wrote on Twitter and said, “At Rs 50,000 EMI it isn’t possible to buy a luxury car. At Rs 50,000 SIP for a reasonable period of time, it is possible to buy a luxury car. SIPs are creating financial freedom for investors to buy what they want.”
At Rs 50000 EMI it isn’t possible to buy a Luxury car.
At Rs 50000 SIP for a reasonable time, it is possible to buy a Luxury car.
SIPs are creating financial freedom for investors to buy what they want.
— Nilesh Shah (@NileshShah68)
Santosh Iyer made this statement in an interview given to Times of India. In the interview, Santosh Iyer said there is a saving midset among Indians because of the fewer social security measures here. This is why, there is a tendency to save not only for yourself but also for your kids. This is unlike the west where you save for yourself to the maximum extent. Post pandemic, there has been a substantial shift in the saving patterns and habits in India. With the arrival of mobile phone applications, investment in such schemes have become a lot more easier than before.
Iyer said, although luxury car sales have been booming post pandemic, it is far from the potential and wealth that India carries. He mentions that by explaining their monthly sales. He says that they receive around 15,000 enquiries about luxury cars but, the actual order size is about 1,500 units only. He even said that there are 13,500 people who desire to buy a Mercedes-Benz or a luxury car but postpone the plans thinking that there might be a dip in the market soon. They then invest that amount in SIPs.
India as a developing country is home to third largest number of billionaires but, majority of people in the country still cannot afford to buy a luxury car. There are multiple reasons for that. In this issue, we feel that SIP’s are not affecting the sales as they are only offering people more financial freedom, which in future would let them buy a luxury car, if they want to.