Why India’s Young Buyers Are Going Straight to Mercedes

0:00Speaker: So we have sold around two Speaker: hundred and thirty thousand

0:02cars Speaker: in India.

0:05Speaker: Meet Santosh Iyer, the CEO of Mercedes-Benz India. Speaker: You can be

0:09the CEO of a company Speaker: or the vice president of a Speaker: company.

0:11Speaker: You can stay in the best penthouse boat in the sea, Speaker:

0:15fishing or in the camellias. Speaker: But you can't take that with you in your

0:18parties. Speaker: What you can take with you is power. Speaker: Welcome back to

0:22Create Wealth podcast. Speaker: Alongside me today is joined by my

0:25co-founder, Sahil. Speaker: What are some of the things that Speaker:

0:28Mercedes has done to build on Speaker: that premium nature of the brand

0:31Speaker: itself? Speaker: You know, there is something which goes back to

0:34our DNA. Speaker: So when we invented the car, we Speaker: had two options

0:37either we could Speaker: have made. Speaker: So in this episode, we're

0:40getting into the real story Speaker: behind that number, the rising demand

0:43for luxury cars in India. Speaker: Why more Indians are willing to pay a

0:46premium instead of chasing Speaker: a discount, and how Mercedes Benz has

0:49built that sense of Speaker: premium ness and trust at scale. Speaker: How do

0:53you measure desirability of the brand? Speaker: We do one hundred crores worth

0:56of merchandise in India. Speaker: That means people are buying one hundred

0:59crores of merchandise Speaker: with an aspiration rite gifting your brother or

1:02sister kid. Speaker: Dad, because the star is quite aspirational. Speaker: You

1:06have insider access to the entire F1 ecosystem also.

1:12Speaker: Because Schumacher joining Mercedes-Benz and he had come to

1:15Speaker: India to drive our cars. Speaker: And I still remember we had

1:18done a customer event with him. Speaker: I told my marketing colleagues Speaker:

1:21to get as many signatures as Speaker: possible. Speaker: So we had caps, t

1:24shirts, certain model cars and Speaker: everything kept, and in three minutes

1:28how much sign you can Speaker: do, you can get it done. Speaker: So we then one

1:31controversial question. Speaker: And if you were not with Mercedes, what are the

1:35three car Speaker: garage you would have. Speaker: If you ask me, I was a

1:38young fan boy of see a beautiful Daytona Speaker: on your wrist. Speaker: How did

1:42you acquire this? Speaker: Because they are so hard to get a hold of. Speaker:

1:44If I say that the person who helped me will not be as kind to Speaker: me, this

1:48conversation is going to give you a rare inside look Speaker: at what it actually

1:51takes to build and protect a premium Speaker: brand in India.

2:01Speaker: Santosh, welcome to the podcast. Speaker: Today I have by my

2:05side to co-host this, uh, Sahiwal. Speaker: Uh, you know, sometimes I

2:09wonder where Sahiwal. Speaker: Why is Sahiwal a wealth manager? Speaker:

2:12Because I think his enthusiasm Speaker: for cars rivals his love for Speaker:

2:15wealth management. Speaker: Uh, so I hope we'll have a great conversation.

2:18Speaker: I'm just worried about being the third person on a date, uh, Speaker:

2:23today, but, uh, we're looking forward to this. Speaker: Well, thanks for joining

2:26us. Speaker: I could see his enthusiasm as we walked in as well, I loved it.

2:30Speaker: You've gone on to become the youngest and the first Indian Speaker:

2:34CEO of Mercedes Benz in India. Speaker: Uh, what was the run up to, uh, Speaker:

2:39to succeeding in the way you Speaker: have? Speaker: I still remember I joined

2:42this company in two thousand and Speaker: nine, twenty twelve. Speaker: A

2:45previous boss of mine, I went to meet him. Speaker: He was not in his chair.

2:48Speaker: So the secretary office is outside. Speaker: And at that time there

2:51was a lady called Reshma. Speaker: And she said, uh, and that we are more

2:54formal culture. Speaker: So she said, what are you looking at? Speaker: I

2:58said, I'm just seeing. Speaker: How would I look in that chair? Speaker: And

3:00then we were laughing. Speaker: And. Speaker: But that time I was a marketing

3:03manager in this company and Speaker: joined the company. Speaker: But apart

3:06from that, it was Speaker: never an aspiration that I need Speaker: to be in

3:08a certain position, a Speaker: certain title. Speaker: Uh, I loved what I did.

3:12Speaker: I did it passionately. Speaker: Uh, the brand has been also very kind

3:15enough to me. Speaker: Uh, they actually invested in me. Speaker: I would say I

3:19did a two year Speaker: program on corporate governance Speaker: compliance

3:22in Lake Constance in Speaker: Germany. Speaker: In that process of two years, I

3:25Speaker: visited many universities in Speaker: Europe, you know, uh, right

3:29Speaker: from, uh, Esmt in Berlin to Speaker: Warwick Business School in

3:32Speaker: London. Speaker: And each of these interventions for a week, two

3:36weeks, the Speaker: intercultural differences as well as the similarities.

3:40Speaker: I could learn a lot about how to Speaker: work in a multinational,

3:43what Speaker: can happen generally in our Speaker: company, you have to go

3:46abroad, Speaker: uh, and then come back if at Speaker: all. Speaker: And here I

3:49was always open to work abroad, uh, for one reason Speaker: or the other.

3:52Speaker: They insisted I continue and the rest is history. Speaker: Here I am,

3:56But I do want to know. Speaker: Santosh. Speaker: You know. Speaker: Category of

4:00premium products which Indians are aspiring to. Speaker: In fact, the

4:04premium segment across all categories has been Speaker: growing much faster

4:08than the bottom of the pyramid. Speaker: But a lot of founders, like us, struggle

4:12with communicating in a Speaker: way that you can retain the premium nature

4:17of the brand. Speaker: Uh, what are some of the things Speaker: that Mercedes has

4:22done well in Speaker: India or abroad, where they've Speaker: been able to

4:25build on that Speaker: premium nature of the brand Speaker: itself? Speaker: You

4:28know, there is something which goes back to our DNA. Speaker: So when we invented

4:32the car, we had two options. Speaker: Either we could have made more and more

4:35cars. Speaker: There is a company in the US Speaker: which decided we will make

4:38more Speaker: and more cars, one color, one Speaker: production line. Speaker:

4:41We will make more and more cars and we will sell. Speaker: Our founding

4:44principle was we will make cars better and better Speaker: from an innovation

4:47perspective. Speaker: So if you chase volume significantly, then you lose

4:53Speaker: sight on Premiumness and you. Speaker: Because frankly, when you are

4:56Speaker: saying premium, you need to Speaker: deliver value. Speaker: Value

4:59will only be delivered when you have product substance. Speaker: You are able

5:02to give customer experience and there is trust. Speaker: All of this takes time,

5:06and when you are into this rapid growth Speaker: phase, you tend to compromise

5:10on two three elements. Speaker: So I think for any category, if they want to

5:13premium, they need Speaker: to first decide what pace of growth they want to

5:17do. Speaker: If you are going for scale, then also there is money to be made.

5:21Speaker: There is no doubt about it. Speaker: But that's a different business

5:23model compared to premium Speaker: wherein you can scale it. Speaker: But

5:27if you do it at any cost, then it's also, you know that Speaker: also not

5:32the best sign. Speaker: And then you lose premiumness also. Speaker: But what

5:35are these compromises like on a day to day basis? Speaker: Like because you are

5:38watching the overall PNL, the scale of Speaker: revenue also, but at the same

5:43time, you are like trying to Speaker: maintain the premium nature and

5:46therefore compromising in some Speaker: sense on near term growth. Speaker:

5:50Like, give me an example of one Speaker: such conflict that would a CEO Speaker:

5:53would face. Speaker: No. You know, today, if you see a. We are under

5:56criticism that Speaker: by not participating strongly in the entry

5:59segment. Speaker: So there are two ways to Speaker: participate in the entry

6:01segment Speaker: in luxury. Speaker: One, I can contain my car. Speaker: I

6:04take out some. Speaker: I give a weaker engine in the car. Speaker: So instead

6:08of a four cylinder engine, I give a three cylinder Speaker: engine or

6:11feature equipment and then I can also be cheaper. Speaker: Or I can do heavy

6:15discounting Speaker: because let me say that I take a Speaker: business call,

6:18let me grow on Speaker: volume. Speaker: I don't make money in this segment.

6:20Speaker: I can discount, but we always need to remember there is a set Speaker:

6:23of people who have bought this car at a certain price. Speaker: At some point of

6:26time, what happens to the residual value at Speaker: that three or four years?

6:29Speaker: They will never, ever buy my brand and they will never, ever Speaker:

6:31try to be the case. Speaker: And frankly, because for us, more so for

6:35Mercedes Benz, this Speaker: is an aspirational purchase. Speaker: The day

6:39I buy a Mercedes Benz, I call my friends and families and Speaker: I show them

6:42the car. Speaker: If there is not this content, that content or this car also,

6:46Speaker: then you know, the pride of ownership goes away. Speaker: So it's

6:50better to be safe and cautious and then not do things. Speaker: We have seen it

6:54all, you know. Speaker: We have been thirty years in this market. Speaker: I

6:56have been seventeen years with this brand. Speaker: I have seen all this ups

7:00and downs happening. Speaker: Uh, we need to be patient. Speaker: We need to

7:02believe in ourselves. Speaker: We need to believe in our Speaker: product

7:05story, brand story and Speaker: be consistent. Speaker: You know, I'll just

7:08take a step back. Speaker: So over two decades ago, a lot of the German brands,

7:11luxury Speaker: German brands actually decided to enter India in a big way.

7:15Speaker: So post Covid, you've seen a, you know, a large amount of Speaker:

7:19influx of money. Speaker: People have sold businesses, Speaker: land,

7:22property, you know, Speaker: working professionals have made Speaker: a lot

7:25of money in their Speaker: businesses. Speaker: Uh, and you've seen a Speaker:

7:28disproportionate growth in Speaker: wealth, right? Speaker: But for somehow

7:31in the last five Speaker: years, at least the numbers that Speaker: they

7:33speak, you're still within Speaker: that forty to fifty thousand Speaker: range

7:37of, uh, luxury cars Speaker: selling. Speaker: Do you do you think we are too

7:40Speaker: early right now, or do you think Speaker: there's still a lot left

7:42for us Speaker: to capture? Speaker: First of all, we have to look at

7:45different prism. Speaker: Last year was around fifty four Speaker: thousand

7:47luxury cars were sold, Speaker: fifty three, fifty four Speaker: thousand.

7:49Speaker: But it's still minuscule, very small. Speaker: But if you look at the

7:53structure of our market, the entry segment Speaker: is hardly thirty

7:56percent. Speaker: The bulk of the cars that are sold are sixty lakhs and above.

8:00Speaker: And for us as a brand, the top Speaker: end segment one point five

8:03crore Speaker: Maybachs AMG is there almost Speaker: twenty eight thirty

8:06percent of Speaker: our sales. Speaker: So those super wealthy guys that

8:08Speaker: you mentioned right now selling Speaker: land, property, making Speaker:

8:11investments, startups, they are Speaker: finding more value in the super Speaker:

8:14luxury segment. Speaker: And there we are growing. Speaker: India is the fifth

8:17biggest market in the world. Speaker: So take a lot of pride. Speaker: But what's

8:20happening otherwise let's say what happened. Speaker: So we have sold

8:23around two Speaker: hundred and thirty thousand cars Speaker: in India.

8:26Speaker: Uh, bulk of these cars are sold Speaker: from twenty fourteen to twenty

8:29Speaker: twenty six. Speaker: I would say almost two hundred thousand cars.

8:32Speaker: And, uh, so that's one India story. Speaker: You can say ten, twelve,

8:36fourteen years it has grown. Speaker: But, uh, if you look at the per Speaker:

8:39capita GDP that used to be Speaker: around sixteen, seventeen Speaker:

8:42hundred dollars in twenty Speaker: fourteen, today it is at twenty Speaker:

8:45seven thousand eight hundred Speaker: dollars. Speaker: So definitely, as a

8:47per capita Speaker: GDP has grown, the car luxury Speaker: car sales has And we

8:51are also Speaker: as. Speaker: If you take the total car market. Speaker: A

8:54luxury market has grown on the same pace. Speaker: Having said that, uh, one

8:58thing is different from luxury cars to Speaker: mass market, which is a price.

9:03Speaker: Uh, if you index the mass market Speaker: car of twenty sixteen

9:07and take Speaker: the price value to twenty twenty Speaker: six, the prices

9:10have gone up by Speaker: twenty five percent, but luxury Speaker: car prices

9:12have gone up by fifty Speaker: percent. Speaker: And the core factor is also

9:15because many of these cars are Speaker: coming imported from Europe. Speaker:

9:19Uh, we have the exchange rate has developed significantly in Speaker: the

9:24last two years itself. Speaker: You can see a fifteen twenty Speaker: percent

9:26depreciation on exchange Speaker: rate. Speaker: So the, the, the, the income

9:29Speaker: level, per capita income level Speaker: has not been able to match up

9:32Speaker: with the price with the increase Speaker: in prices of luxury

9:35cars as Speaker: well. Speaker: So we have no car below fifty lakhs. Speaker:

9:38Uh, actually. Speaker: Uh, and so, and that's a fact. Speaker: And, but there

9:42is volume there, there is volume. Speaker: If there are cars at thirty

9:44Speaker: five, forty lakhs, there will be Speaker: huge volume. Speaker:

9:47Ideally, there would have been cars available at forty or forty Speaker:

9:50five if the price increases have not gone up. Speaker: So from a data

9:54perspective, Speaker: that's what's holding back also Speaker: the growth.

9:57Speaker: I would say when you talk about these price segments of cars. Speaker:

10:00Yeah. Speaker: So as potentially the prices stabilize and if let's say

10:04Speaker: currency depreciation isn't at the same pace, you think that Speaker:

10:08people will actually invest more in these kind of experiences. Speaker: I

10:11think yes, they will invest more on experiences because Speaker: there is I

10:15think the star is very, very desirable. Speaker: Right. Speaker: Let me give a

10:19lot of how do you Speaker: measure desirability of the Speaker: brand?

10:21Speaker: We do one hundred crores worth Speaker: of merchandise in India, one

10:25Speaker: hundred crores. Speaker: That means huge number Speaker: keychains, t

10:28shirts and I'm Speaker: saying model cars for gifts and Speaker: others.

10:32Speaker: That means people are buying one hundred crores of merchandise

10:34Speaker: with an aspiration, right? Speaker: Gifting your brother or sister

10:37Speaker: kid dad because the star is Speaker: quite aspirational. Speaker:

10:42How to convert that into real sales? Speaker: And as I said there, of course,

10:45income level on one pyramid, the Speaker: price increases on the other.

10:49Speaker: And also, I would say the offering logic that we are able Speaker:

10:52to give, because even when you look at interest rate, India is Speaker: very

10:56expensive market, you know, eight to ten percent on Speaker: automotive financing

11:00compared to the two to three percent. Speaker: And so when you talk about

11:03leasing in India, it can't be as Speaker: cheap because in leasing, you

11:07have to put the interest on the Speaker: full value of the value of car become

11:10super expensive. Speaker: So the moment, let's say, if Speaker: interest rates

11:13come down, per Speaker: capita GDP goes up, car pricing Speaker: is almost

11:17stable because of Speaker: exchange. Speaker: This will explode. Speaker:

11:21There's no doubt about it, you know, but your narrative is so Speaker: right

11:23because even if you look at the real estate market, for Speaker: example,

11:26today, you're seeing the maximum amount of Speaker: registrations actually in

11:29the ultra high luxury segment and Speaker: not so much in the affordable

11:32housing and so on and so forth. Speaker: Right? Speaker: So maybe it's a similar

11:35logic, similar logic. Speaker: Yeah. Speaker: And who are the guys buying

11:38these cars? Speaker: Like what segment would buy a G63 or a S-Class, Maybach,

11:43etc.? Speaker: C G is a very different phenomena. Speaker: A lot of people are

11:46dreaming about it, right? Speaker: They must be having multiple Mercedes Benz in

11:49their house. Speaker: They still want. Speaker: This was one day I will buy a

11:52Jeep. Speaker: So the moment they have a huge land transaction or sometimes

11:55Speaker: some signing of a cheque or something coming up, or if Speaker:

11:59you're a developer or a developer or, you know, you get Speaker: some

12:01sometimes IPO money, some stuff is there, then that big Speaker: chunk of

12:05money, one big chunk is for the G. It is for sure. Speaker: They may still buy it

12:10on a, I would say on a loan, uh, because Speaker: they may have better ways to

12:13allocate their capital and make Speaker: more money out of it. Speaker: And the

12:16car loan is eight nine percent. Speaker: They can make fourteen fifteen from the

12:19market. Speaker: So they may still buy on a loan. Speaker: But the starting the

12:22trigger is I made money. Speaker: Now let me fulfill my dream and aspiration.

12:26Speaker: Then I want to spend some time on this, uh, purchase behavior. Speaker:

12:30Uh, I read somewhere that the average Mercedes car buyer is Speaker: today

12:34about thirty eight, and it's funny that they Dezerv. Speaker: Client is also in

12:38that ballpark. Speaker: Uh, how is a brand like Mercedes, which has been

12:42around Speaker: for a couple of hundred years, or one hundred years plus, uh,

12:47Speaker: talk to somebody who's thirty eight today, or I have the best Speaker:

12:51race car driver winning formula one at nineteen. Speaker: So with Kimmy doing

12:55its job as well. Speaker: So I think the brand has reinvented ourselves. Speaker:

12:59One thing is clear, and I keep Speaker: telling this to my teams as Speaker:

13:02well. Speaker: My mandate and our mandate is as Speaker: long as there is

13:05a sparkle in Speaker: the young boy's eyes for the Speaker: three pointed

13:08star, our job is Speaker: done. Speaker: So I think one, the brand has Speaker:

13:11reinvented itself, uh, by Speaker: products innovation. Speaker: Uh, today

13:15again, the CLA, if I Speaker: talk about Nvidia chips inside Speaker:

13:18supercomputing power inside AI Speaker: inside. Speaker: This is what the

13:22younger Speaker: generation who is today looking Speaker: out to purchase cars

13:25wants in Speaker: their machine. Speaker: So and of course they want

13:28Speaker: performance demonstrated in Speaker: formula one demonstrated in our

13:31Speaker: cars. Speaker: So we have been relevant for one forty years. Speaker:

13:34And the challenge and the Speaker: responsibility both is to remain

13:37Speaker: relevant for the next one forty Speaker: years. Speaker: And this is a

13:39continuous journey. Speaker: We try to do our best, but the very fact that the

13:43average age Speaker: of an S-Class buyer is thirty eight shows that. Speaker: And

13:47these are not, again, upgraders. Speaker: You know, in the past we used

13:49to Speaker: have I will I have a mass market Speaker: car. Speaker: Then I buy

13:53a an entry segment car slowly. Speaker: I buy an E-Class and then an S-Class.

13:57Speaker: Today the first car they straight. Speaker: They have decided

14:01that till I Speaker: will only drive my own car till Speaker: the. Speaker: Till

14:04the time I use an Uber and Ola maybe. Speaker: But the first car may be an

14:07S-Class. Speaker: That's also. Speaker: I think they have put a threshold for

14:11them to achieve. Speaker: You know, this is also the young Speaker: India which

14:14says that I will do Speaker: this direct. Speaker: I won't go that step

14:17pattern. Speaker: So that's a very different trend or pattern. Speaker: You

14:20can see that people are putting high benchmarks and then Speaker: they want

14:23to achieve it. Speaker: Yeah. Speaker: And also like the fact that Speaker:

14:25nearly twenty percent of the Speaker: buyers are actually salaried Speaker:

14:28individuals. Speaker: That in itself is fairly surprising because, uh, one

14:32Speaker: would have thought that they don't have enough disposable Speaker:

14:35income, but probably this aspirational aspect of it is Speaker: actually what

14:39is driving that. Speaker: So first credit should go to corporate India.

14:41Speaker: They are paying So definitely on tax paid money. Speaker: And exactly

14:46because my heart goes out to them. Speaker: I am a salaried individual, so

14:49I Speaker: completely my heart goes out to Speaker: them. Speaker: But because

14:52for businessmen, buying luxury cars is great. Speaker: You know, thirty percent

14:55Speaker: deposition, you get so and you Speaker: save thirty percent tax or nine

14:58Speaker: percent on three years, twenty Speaker: seven percent anyway, you are

15:01Speaker: keeping. Speaker: So when you sell that. Speaker: So technically, it's

15:03a great Speaker: business case to buy cars on Speaker: company. Speaker: And

15:06so that's a no brainer. Speaker: But for the salaried, it's a leap of faith.

15:09Speaker: There is no such benefit available in the book. Speaker: A couple

15:12of companies are giving leasing, which is for salaried Speaker: employees as a

15:15retention tool. Speaker: So they give a car at the end of Speaker: fourth year,

15:18this car becomes Speaker: yours. Speaker: So that's also one way.

15:19Speaker: Why how some of these salaried customers are able to get in. Speaker:

15:23But the aspiration aspect is great, right? Speaker: You can be the CEO of a

15:28company Speaker: or a vice president of a Speaker: company. Speaker: You can

15:31stay in the best penthouse boat in the sea Speaker: fishing or in the

15:35camellias, but you can't take that with you in Speaker: your parties, right?

15:39Speaker: Yeah. Speaker: What you can take with you is Speaker: maybe car, a

15:41watch and something Speaker: else as. Speaker: So end of the day, it's also a

15:45Speaker: reflection to say I have arrived Speaker: and. Speaker: And

15:48sometimes I think the Speaker: culture now in salaried Speaker: professionals

15:51is to reward Speaker: themselves, uh, because there is Speaker: a lot of blood

15:54and sweat to Speaker: reach a lot of prudence to reach Speaker: a lot of, uh,

15:58I would say Speaker: savings. Speaker: And they have really gone Speaker:

16:01through and now I want to reward Speaker: myself. Speaker: And I think

16:04cars are a great means to do that. Speaker: Actually. Speaker: It's also a

16:07family can enjoy it. Speaker: So you can see a sharp growth there. Speaker: See a

16:11beautiful Daytona on your wrist. Speaker: Did you how did you acquire

16:14this? Speaker: Because they are so hard to get a hold of. Speaker: If I say that

16:17the person who helped me will, will, will not Speaker: be as kind to me.

16:21Speaker: But you know, we are in a luxury business, I think, and that also

16:24Speaker: helps a lot. Speaker: But yeah, I waited for it. Speaker: But I like, I,

16:28I, yeah, that's Speaker: something and I like to collect Speaker: a bit, but

16:31again, you can't go Speaker: extreme. Speaker: You need to then you want to

16:34buy Speaker: a winding machine for the Speaker: watches, then you want to buy

16:36Speaker: some more. Speaker: So because this is again all of this never no.

16:39Never ending. Speaker: Exactly. Speaker: One controversial question you can

16:44answer in two ways. Speaker: You're with Mercedes, your best three car garage

16:47that you would Speaker: have from the Mercedes table. Speaker: And if you were

16:49not with Mercedes, what is the three car Speaker: garage you would have? Speaker:

16:53Wow. Speaker: So, you know, with Mercedes Speaker: Benz, the C63, AMG,

16:57I'm saying Speaker: not the two zero four, the two Speaker: zero four.

17:00Speaker: I would love to have it any day. Speaker: Yeah yeah. Speaker: Uh,

17:03the garage can't be complete without a G. Uh, I would say Speaker: that's also

17:07something, but electric or the G sixty three. Speaker: Uh, I would go actually

17:10for electric because the other two Speaker: will be combustion engines,

17:13which is, and the third one in Speaker: S-Class for the daily run. Speaker: So

17:16that completes my three day. Speaker: And if you ask me for the, for Speaker:

17:19the competitor garages, uh, I Speaker: would say definitely I was a Speaker:

17:23young fanboy of Ferrari when I Speaker: grew up. Speaker: So there, um, you can

17:27give me any Ferrari. Speaker: I should be happy, happy. Speaker: Uh, you know,

17:30I, my first car was actually, which I bought Speaker: from my own money was a

17:34Fiat Palio one point six. Speaker: Wow. Speaker: Uh, there was a Schumacher

17:37advertising. Speaker: Yeah, Yeah, yeah. Speaker: With with Sachin Tendulkar

17:41etc., which came. Speaker: And that's what so I was that's why I'm a big fan

17:44of, uh, Speaker: Ferrari as well. Speaker: But I think in terms of other

17:48brands I have, it depends on Speaker: which car comes in. Speaker: Last

17:50seventeen years I've been Speaker: driving this brand, working for Speaker:

17:53so many years in the automotive Speaker: industry. Speaker: I've always, uh, you

17:56know, I Speaker: have never had to purchase a car Speaker: in the last

17:59twenty, twenty five Speaker: years. Speaker: But from a reliability

18:02perspective, I have a lot of Speaker: respect for Toyota. Speaker: Honestly, I

18:05worked for the brand five years. Speaker: If you ask me in India, I think

18:08Speaker: there is not better car than the Speaker: Innova, uh, which is a

18:11Speaker: workhorse. Speaker: And you can, uh, Mr. Dependable, Speaker: I

18:14would say at any point of Speaker: time.

18:17Speaker: On the Daytona and the cars, do Speaker: you have like a, like, how do

18:21Speaker: you think about this in your Speaker: overall portfolio? Speaker:

18:23Because a lot of people that we Speaker: talk to have an aspiration of Speaker:

18:27having either watches or art or Speaker: cars or all three or all three Speaker:

18:30as a part of their overall Speaker: portfolio. Speaker: So, uh, walk me

18:34through your Speaker: construct of your portfolio and Speaker: whether these

18:38collectibles you Speaker: think of them as portfolio items Speaker: or

18:41experiential. Speaker: This has gone up three times or more. Speaker: So. But

18:46the credit I very honestly though, I love it. Speaker: I was still in two

18:49minds whether to do that invest. Speaker: But my wife pinged me again.

18:52Speaker: Come on, you are. Speaker: And this was when I became the CEO. Speaker:

18:55She said, now you can reward yourself. Speaker: Now you have a reason why, why

18:57you can, otherwise you need it. Speaker: So that that's done. Speaker: But I

19:00think these are something that comes along the way. Speaker: I never plan or

19:04try to keep a corpus for A, B or C. I think Speaker: that that's possible.

19:07Speaker: But in fundamentally, I think long term on equities, um, we Speaker:

19:11spoke about sips. Speaker: I think that's the right way to get in. Speaker:

19:14Uh, I feel I, I never directly invest in stocks because I don't Speaker: have the

19:17competency. Speaker: So I have somebody who advises Speaker: helps me, a close

19:20friend of Speaker: mine. Speaker: And, and in that sense, uh, I look at long

19:24term, my Speaker: expectations on risk are well known, are also much more

19:28Speaker: conservative in nature, also conservative on the return. Speaker: So

19:32otherwise you can't have a Speaker: conservative expectation and an Speaker:

19:35aggressive return. Speaker: So that is also managed to some extent, but I never

19:39entered Speaker: with, with, uh, you know, with even if there are any payouts

19:43or Speaker: anything, uh, together to the market, it's always better to

19:46Speaker: stay in debt, stagger and slowly enter segments, the usual

19:50Speaker: diversification rule of four or five percent in gold, something Speaker:

19:53on the international, something on equities keep fifteen twenty Speaker:

19:56percent in debt. Speaker: Uh, I think that that's the cardinal rule. Speaker:

19:59I follow no other rocket science. Speaker: I would say absolutely.

20:02Speaker: As CEO of MBI, you have insider Speaker: access to the entire F1

20:07Speaker: ecosystem. Speaker: Also, like what are some of the Speaker: memories,

20:11uh, that you would Speaker: have of F1 or some experiences Speaker: that only

20:16were available to you Speaker: and they are leading the Speaker: construction,

20:19uh, the Speaker: constructors championship right Speaker: now by about

20:21seventy three Speaker: points. Speaker: Yeah, yeah. Speaker: But, uh, yeah, but

20:23again, I think leading again last two Speaker: years was not so great.

20:26Speaker: We have again come back on this journey and that's motorsports Speaker:

20:29all about, you know, it's it's about about the sport itself, Speaker: the

20:32technology that goes in. Speaker: But if I were to ask me the best memory.

20:35Speaker: twenty thirteen, when the Formula One came to India. Speaker:

20:39Twelve thirteen. Speaker: Firstly, I was able to play

20:42some Speaker: role because of the partnership Speaker: with the circuit,

20:45and we were Speaker: doing a lot to get the Formula Speaker: One there. Speaker:

20:48But more importantly, it was Schumacher joining Mercedes Benz Speaker: and he

20:52had come to India to drive our cars. Speaker: And I still remember we had

20:55done a customer event with him. Speaker: And, you know, everybody wants a piece

20:59of Schumacher. Speaker: So what we had done is in a room, I told my marketing

21:03Speaker: colleagues to get as many signatures as possible. Speaker: So we

21:07had caps, t shirts, uh, Speaker: certain model cars and Speaker: everything kept.

21:11Speaker: And, uh, the so the assistant to Speaker: Schumacher, she's a very

21:15nice Speaker: lady. Speaker: She's still with him. Speaker: Uh, she told you have

21:18five minutes as per contract, nothing Speaker: more for signing. Speaker: Uh,

21:22no. Not five. Speaker: It was, uh, it was three minutes as per contract.

21:26Speaker: Nothing more than that. Speaker: And in three minutes, how much

21:28Speaker: sign you can do, you can get it Speaker: done because he said leave it

21:31to Speaker: us. Speaker: So we then did a process wherein we even checked the

21:35drying Speaker: nature of the pen because and we actually kept the caps

21:40open, we Speaker: kept a complete assembly line of things to sign for

21:44Schumacher. Speaker: Okay. Speaker: And it was a room. Speaker: It was a banquet

21:48hall in the JP Noida Greens. Speaker: And when Schumacher came in, Speaker:

21:51Michael, he said, what is all Speaker: this? Speaker: I have to sign all this.

21:53Speaker: He said, we have timed it. Speaker: We were told you have three

21:56minutes and you have to sign. Speaker: So he smiled. Speaker: No grin. Speaker:

21:59He smiled, not a grin. Speaker: And he started signing. Speaker: Yeah. Speaker:

22:03He finished almost everything. Speaker: Of course the three minutes became three

22:07point say 10s more. Speaker: But we finished and then. Speaker: The best

22:10compliment in my life Speaker: is he said, you have the best Speaker: team in

22:14the world, and you have Speaker: replicated Formula One in a very

22:16Speaker: different manner on what you Speaker: have done. Speaker: And I said,

22:19I did all of this so that every customer, none of Speaker: this is going

22:22to a couple of them, to our colleagues, but Speaker: most of them are to our

22:25customers because they they all Speaker: would like to have a piece, I'm sure

22:28many customers who may Speaker: listen to this. Speaker: And if they have a

22:30piece of this, this is memorable for life Speaker: and this is forever

22:33actually. Speaker: So that effort that we took. Speaker: So that's one piece

22:36of, I would say. Speaker: And of course, I am a if you ask me from a management

22:39style, I Speaker: love Toto Wolff. Speaker: I just love the leadership and

22:42Speaker: the, and the coolness that he Speaker: has privileged to meet him a

22:45Speaker: couple of times, not once and Speaker: hear him many times actually in

22:48Speaker: our management team meetings, Speaker: etc. so I think that he is

22:51Speaker: something actually in terms of Speaker: leadership and a lot of things

22:54Speaker: that he tells us, the way how he Speaker: manages teams, how he gives

22:58Speaker: messages, how he drives Speaker: competition, it's brilliant

23:01Speaker: actually. Speaker: So that's something to learn. Speaker: I think

23:03from a strategy Speaker: perspective, he's been he's God, Speaker: he's God.

23:06Speaker: I you can implement many of Speaker: those strategies and what he

23:10Speaker: feels. Speaker: In fact, you know, even in the Speaker: Indian Grand

23:13Prix, I remember we Speaker: were in the pits and we were Speaker: lagging.

23:16Speaker: And he clearly said, no, no, this car will be at this Speaker:

23:19position at the end of the race, the amount of telemetry data Speaker: they

23:22were able to analyze, send it back to Berkeley in UK, come Speaker: back able

23:25to have strategies. Speaker: It's it's next level. Speaker: The entire sport is

23:29it's a. I don't think there's any sport Speaker: which uses technology as much

23:33than machines and people. Speaker: It's a super interface of all three. Speaker:

23:38Yeah, I think it's fascinating that so many people who are not Speaker: on the

23:41circuit are contributing to the success of the success of Speaker: the person

23:45driving the car. Speaker: Yeah. Speaker: And it's like very reflective of

23:47Speaker: what I guess happens in Speaker: business. Speaker: Also,

23:49sometimes, you know, a lot of us end up taking credit for Speaker: really the

23:53work that people who are behind the scenes are doing. Speaker: If you look

23:56at Formula One Speaker: drivers, when they win a race, Speaker: the first

23:58thing they do is thank Speaker: the team. Speaker: Yeah, continuously.

24:01Speaker: Right. Speaker: Because it's that's a big world Speaker: which has

24:04gone to make them Speaker: successful. Speaker: It's a huge, huge, huge work

24:06Speaker: which has gone into making that Speaker: win happen. Speaker: And it's

24:09all by microseconds, right? Speaker: Win win is not like huge laps and lap time

24:13of wins. Speaker: It's just so close. Speaker: So each of those seconds, how

24:17you take out from the car, what Speaker: do you do? Speaker: I think that's

24:20fascinating globally. Speaker: When you spec a Mercedes Benz, you can spec a lot

24:24of options Speaker: into the car, right? Speaker: Especially in the US markets,

24:27Speaker: European markets, etc.. Why have Speaker: we not seen that level of

24:30Speaker: customization as yet for Indian Speaker: consumers. Speaker: Or will it

24:33come in the future with the challenge? Speaker: You see, we have manufacturers

24:36Speaker: in the top end, which are CPUs Speaker: where you can spec anything,

24:38Speaker: whatever you want, you can Speaker: import because there are CPUs,

24:40Speaker: they are exempted under the Speaker: homologation requirement in

24:42Speaker: India. Speaker: Now India has certification requirement. Speaker: The

24:46moment I start specking a couple of topics. Speaker: Maybe it is

24:49certification wise, Speaker: I am not able to get it Speaker: certified.

24:51Speaker: Let me take an example of black tinted glasses. Speaker: Okay. Speaker:

24:54It's favorite. Speaker: India is very hot country. Speaker: People complain

24:57about air Speaker: conditioning in some of the Speaker: German cars may not be

25:00as good Speaker: as the Japanese cars, but our Speaker: cars are working even

25:03in Middle Speaker: East, right? Speaker: And consumers love it. Speaker: The

25:06difference is now dark glasses. Speaker: Indian regulation doesn't allow dark

25:10glasses. Speaker: We can't do anything non uh outside the legal framework.

25:14Speaker: We give normal glasses. Speaker: Of course I give special

25:17Speaker: protection sound protection, UV Speaker: thirty percent. Speaker: But

25:19it's not the same as dark glasses. Speaker: Right? Speaker: So this is one

25:22example. Speaker: What regulation doesn't allow us to do or configure, but

25:25it is Speaker: what it is. Speaker: Yeah. Speaker: So Sahil talks about all

25:28of these aspects. Speaker: It's Latin and Greek to me. Speaker: But I do want

25:31to know. Speaker: Santosh. Speaker: Like, what are some of the most call it

25:35exotic customizations Speaker: that people have reached out to you with that

25:39they want to make Speaker: to the car? Speaker: Wow. Speaker: They want to.

25:43Speaker: First of all, many of them have their favorite color shades and Speaker:

25:45they sometimes come on. Speaker: The paint is the first thing that people

25:48want to make it as Speaker: personal as possible. Speaker: I know a customer and

25:52some of Speaker: you may know in social media Speaker: also he likes all his

25:55cars is Speaker: yellow. Speaker: And so he wanted a Mumbai based, Bombay based

25:58customer. Speaker: They wanted everything as yellow. Speaker: He has

26:00three four Mercedes Benz Speaker: S and G wagons and all all Speaker:

26:04customized. Speaker: But also on the interior side, Speaker: you know,

26:07specific fabric trim, Speaker: color upholstery. Speaker: But apart from

26:10customization, Speaker: people are also spending on Speaker: airfares. Speaker:

26:13I have customers spending forty Speaker: lakh rupees to import the car Speaker:

26:16via air via Lufthansa flight Speaker: coming from Germany to India Speaker:

26:20because they wanted the car Speaker: yesterday I waited for eight Speaker:

26:22months. Speaker: Now for my G. I can't wait the Speaker: next two or sixty days

26:26or seven Speaker: forty days is shipping lead Speaker: time. Speaker: They want

26:29to ship it. Speaker: They are ready to pay their Speaker: premium because

26:31there's a Speaker: wedding in the family I want to Speaker: gift. Speaker: I want

26:33to give my dad's birthday, my birthday Speaker: anniversary, I want it.

26:36Speaker: So I think that that's a inelasticity. Speaker: You can see at

26:40some point where people go to any extreme to get Speaker: the car, and

26:44also they want to be a part of the experiences. Speaker: They want to go

26:46for the G wagon drive. Speaker: We have this ice driving in the in our blog.

26:51Speaker: I've actually gone for that. Speaker: Oh, wow. Speaker: So that's an

26:53experience by itself. Speaker: Again, you had five star Michelin chefs.

26:56Speaker: Yes, yes, yes, that's a calorie bed. Speaker: So you should talk more

26:59about it because that was actually for me Speaker: an amazing experience

27:02because it was three nights, I think. Speaker: Yeah. Speaker: And every night

27:05you had someone go out and draft a new track. Speaker: That was the first time

27:09it's on a frozen lake, actually, it's on Speaker: a frozen lake. Speaker: So you

27:12can only go between October to February. Speaker: Exactly right. Speaker: Even a

27:15Boeing can land. Speaker: A plane can land on that frozen lake. Speaker: So

27:18they have tested so and what Speaker: they do is in these frozen Speaker:

27:21lakes, they make different Speaker: tracks. Speaker: Uh, or you can say the

27:25Nurburgring, Nurburgring. Speaker: So and then you can actually on ice the

27:29good part and they Speaker: switch the ESP off. Speaker: So basically the only

27:32if your Speaker: capability you are drifting, Speaker: they treat you as

27:35well on what Speaker: the car can do, what you can do, Speaker: you become a

27:38better driver, uh, Speaker: once you're back because you Speaker: really learn

27:41how to be in Speaker: control. Speaker: So these are things and limited slots

27:44also. Speaker: So, uh, yeah, so these are Speaker: things which, uh, you know,

27:48our Speaker: customers would love to on the Speaker: top end, they want these

27:50Speaker: experiences and they're ready to Speaker: pay. Speaker: Many of them

27:53just pay and they're ready to participate. Speaker: You made a very

27:56big departure as Speaker: Mercedes in the sales process Speaker: itself.

28:00Speaker: Uh, I'm told that people Speaker: actually write out a separate

28:03Speaker: check to Mercedes India and to Speaker: the dealer. Speaker: Uh, and

28:08this is very resonant Speaker: for us in the wealth management Speaker: space

28:11because, you know, there's Speaker: one way of making money as a Speaker: wealth

28:14manager is by commissions Speaker: from the manufacturer or the Speaker: other

28:18way is not make any Speaker: commissions, but actually charge

28:20Speaker: the client. Speaker: But it's harder to do this than it seems.

28:24Speaker: It seems easy to say because in Speaker: India, I mean, I'm sure there

28:28Speaker: would have been some pushback Speaker: from the dealerships, uh, as

28:31Speaker: well as, you know, how consumers Speaker: reacted. Speaker: How

28:34has that experience been? Speaker: Actually, how did you think about it?

28:37Speaker: And then how did it play out? Speaker: So, you know, there's an old

28:40adage saying never let a crisis Speaker: go to waste. Speaker: Thankfully, we had

28:43Covid, I Speaker: should not say thankfully, but Speaker: we had Covid

28:46and it was a big Speaker: crisis. Speaker: Uh, but and in that point, my

28:49ex Speaker: colleague, the CEO here, Martin Speaker: Schwenk, he and me, we

28:53were Speaker: brainstorming. Speaker: And when we put it across the Speaker:

28:55organization, they said, you are Speaker: crazy. Speaker: This will worse

28:58time. Speaker: First time is bad. Speaker: We don't know if the future

29:01exists. Speaker: And on top you want to change the business model. Speaker: But

29:04when we understood what is Speaker: happening in the automotive Speaker:

29:07space, there is this word called Speaker: push. Speaker: This push means

29:11I push the car from the OEM to the dealer. Speaker: The dealer pushes it to

29:14the customer. Speaker: In this push model, what happens is you are

29:18discounting, uh, Speaker: because there is a lot of stock. Speaker: India is a

29:21high interest rate market pressure to liquidate. Speaker: And then people

29:24feel, let me roll the money. Speaker: Right. Speaker: The dealers forget that.

29:27Speaker: What? Speaker: The money they have in their drawer, only five six

29:29percent Speaker: belongs to them. Speaker: The balance belongs to the OEM

29:31or to the bank, but they start Speaker: spending from there. Speaker: Also, so

29:34many of the dealers are going bankrupt. Speaker: And then the business model,

29:37Speaker: even today in Indian automotive Speaker: industries. Speaker: Let's make

29:40money from service. Speaker: Yeah. Speaker: And in sales I may lose money,

29:43Speaker: but in service let me make Speaker: money. Speaker: And with that,

29:45the entire Speaker: customer experience is gone for Speaker: a toss. Speaker:

29:48Customer feedback was was I have to haggle. Speaker: I had a few of my big

29:52dealer partners, uh, somebody in law Speaker: wanted a car. Speaker: And, uh,

29:56when he asked, uh, our Speaker: dealer partner, he gave a X Speaker: discount.

29:59Speaker: He went to the other partner and got a discount. Speaker: So he came

30:03and said, Santosh, you know, my car dealer is Speaker: giving more discount

30:06than me. Speaker: And you got my father, actually. Speaker: So I told, you have

30:09to tell your Speaker: father in law he should trust Speaker: you. Speaker: Why

30:11did he go to the dealer? Speaker: But the fact is, this is happening in

30:14families and you Speaker: are not able to, because the car dealer may be under

30:17pressure to Speaker: sell a car. Speaker: He gets. Speaker: So there is

30:19negotiation power of the customer. Speaker: And that was all devaluing

30:22residual values, this entire Speaker: luxury experience was just outspoken and

30:26it was not there Speaker: playing one against the other other other deal.

30:29Speaker: So we said, let's change and turn it upside down. Speaker: We make

30:32dealers as agents. Speaker: And frankly, I learned it from the watch industry

30:36because also Speaker: we were doing these business cases internally and we

30:39said Speaker: that whatever money you give, it goes to the customer, frankly.

30:43Speaker: So it is not dealers are not profitable as well. Speaker: So and when

30:46we called all the dealers and they said, hey, how Speaker: can you do it?

30:49Speaker: My top line goes away this, that my, my core thing, we told them,

30:52Speaker: you want to make profit or you want to make top line. Speaker: If you

30:55want to make profit, then Speaker: we be ready to sell, he said, Speaker: but why

30:59should somebody buy from Speaker: me? Speaker: We said, that's the only reason

31:02is customer experience. Speaker: If there are two or three Speaker: dealers

31:04in a market who gives a Speaker: better service, let the customer Speaker:

31:08decide. Speaker: And we put the power back to the Speaker: customer and bring

31:10the Speaker: competitiveness. Speaker: I think it's been now close to five years

31:13now in October. Speaker: Now we will do. Speaker: We would have done sixty

31:16thousand odd cars now. Speaker: Wow. Speaker: Fabulous model. Speaker: And

31:19today it's there. Speaker: Now it's gone live in Korea. Speaker: Last two months

31:22back it went Speaker: live in Australia, Thailand, Speaker: Malaysia, Germany.

31:25Speaker: Our home market now is written in the future. Speaker: Many other

31:28European markets have all shifted to this business Speaker: thought process

31:31was derived. Speaker: And yeah, there was a to be Speaker: honest, a global

31:33thought process Speaker: was there. Speaker: They were doing pilots.

31:35Speaker: India was one of them. Speaker: But the Indian model on. Speaker: We

31:39were much faster to start and implement it. Speaker: And then other markets like

31:43Speaker: Australia and many others Speaker: followed suit. Speaker: And

31:45there is always a cross learning. Speaker: Turkey is another example that

31:48we are learning from each other Speaker: on the on the customer journey, on the

31:51process. Speaker: Even if you ask me today, I have Speaker: made even further

31:54changes in the Speaker: customer. Speaker: But sometimes it's also

31:56Speaker: complicated, as you rightly Speaker: said, like check, check, check,

31:59Speaker: check. Speaker: Finance customer also gets confused a bit.

32:02Speaker: So how to make it even a bit more simpler? Speaker: So it's a

32:05continuous journey, Speaker: but I think that also shows that Speaker: we are

32:08away from the treadmill Speaker: of just pushing, and we are more Speaker:

32:11bothered about the customer Speaker: experience. Speaker: The residual value

32:15of our cars is the proof point. Speaker: You know, I have significantly Speaker:

32:18better service for my car Speaker: compared to any other brand in Speaker:

32:20the market. Speaker: So I think we have been able to achieve that because of the

32:22Speaker: direct to consumer model. Speaker: There's been a lot of talk or

32:26maybe less amount of talk about Speaker: the E20 fuel that's been introduced

32:31right now. Speaker: And we've actually seen a lot of OEM manufacturers being a

32:35little Speaker: hush hush about it. Speaker: Right. Speaker: I see I'm being

32:38the one body, which is supposed to be a Speaker: collective representative for

32:42the entire body. Speaker: But do you think at times, at least what we've read

32:45and seen, Speaker: a lot of the OEMs are working for their own goals rather than

32:48Speaker: a collective voice. Speaker: Do you think that can be improved or

32:51there's any gaps Speaker: over there today? Speaker: No, I think firstly, you

32:54know, Speaker: emission regulations or anything Speaker: to do with all of this

32:57has an Speaker: impact on any automotive Speaker: company, right? Speaker: Most

33:01of them are listed companies in India. Speaker: Their strategy is on which

33:04Speaker: powertrain, petrol, diesel plus Speaker: the more and more compliances

33:09Speaker: you add, it adds cost when you Speaker: add cost. Speaker: I told you

33:11there is an impact on demand, right? Speaker: So clearly companies by

33:16Speaker: themselves would like to delay Speaker: any of the legislative nature

33:21so Speaker: that the. Speaker: Because India is still a growing economy, you

33:24know, as a Speaker: consumer, you ask someone, they will say, I want

33:27everything. Speaker: Are they ready to pay for everything? Speaker: No, that's

33:30a difference. Speaker: They will. Speaker: And that's where the demand

33:32then goes away. Speaker: So there has to be a fine balance in these two. Speaker:

33:36I would still say that the Speaker: consultative process is very Speaker:

33:38strong. Speaker: You know the government comes to CM. Speaker: CM is able to

33:42discuss with all the committee members. Speaker: Let me take B6 implementation.

33:46Speaker: We all pushed back, but everybody was ready in first Speaker:

33:50April twenty twenty. Speaker: So are we now the the advantage Speaker: we have

33:55as Mercedes Benz is some Speaker: of the regulations coming here Speaker: are

33:58already there in Europe much Speaker: earlier. Speaker: So on B6, for example,

34:01we were ready in twenty eighteen. Speaker: We are a multinational company

34:04Speaker: supplying cars worldwide E Speaker: twenty I was ready twenty

34:07twenty Speaker: one oh six or ever since B6 cars Speaker: I'm selling all my cars

34:12are E20 Speaker: today we are already E twenty Speaker: five. Speaker: Now

34:15whether E twenty five will come to India. Speaker: Maybe the answer is no,

34:17because Speaker: right now the government I, I Speaker: don't think is

34:19in any mood to Speaker: change quickly, but we are ready Speaker: already.

34:23Speaker: So I think that we can afford because we are operating at a Speaker:

34:26different price point. Speaker: The cars that we are selling are Speaker:

34:29engineered or over engineered a Speaker: bit more for many of these Speaker:

34:32topics. Speaker: But when you look at the mass Speaker: market, which is

34:35built, which is Speaker: actually able to get that price Speaker: point based

34:38on built to spec and Speaker: making the minimum viable Speaker: product that the

34:41market needs on Speaker: the regulatory side and the Speaker: customer side,

34:43then it is Speaker: difficult. Speaker: So I think there is no right and wrong.

34:46Speaker: But if I look at the current Speaker: cafe, cafe is a corporate

34:49Speaker: average fuel efficiency Speaker: recommendation. Speaker: CM has

34:52been unanimous for the first time. Speaker: CM was able to get along with

34:56members and the government. Speaker: A very nice, uh, meeting ground, Speaker:

35:00uh, in terms of the regulatory Speaker: setup. Speaker: And I think that's a

35:03very Speaker: healthy sign for the industry Speaker: and for the

35:06consultative Speaker: environment with the government Speaker: as well.

35:08Speaker: Santosh, you know, as a first Speaker: time buyer, would you, are you

35:11Speaker: seeing people buying EVs or more Speaker: Ice? Speaker: And do you

35:15think as as a country, as a, you know, Speaker: multiple large cities in India.

35:18Speaker: Are you ready for that? Speaker: Because you still hear people

35:20complaining if they don't have Speaker: charging at home. Speaker: Outside is

35:24you know, it's just broken still. Speaker: No, you are right. Speaker:

35:26See, we therefore started from a top down approach. Speaker: So the first EVs

35:29that we got Speaker: were in the top end segment x g Speaker: electric x Maybach

35:33QC was the Speaker: first EQC. Speaker: Later on came in. Speaker: From a

35:37localization perspective, the EQS sedan was the first one. Speaker: The EQC and

35:41the EQC were just imported Cbus there. Speaker: So. But if you see the top end

35:45today, twenty five percent of Speaker: the cars we are selling are EVs.

35:48Speaker: So that's a good thing. Speaker: Simple reason many of our

35:51Speaker: customers are charging at home Speaker: or office. Speaker: They are

35:53not dependent on public chargers. Speaker: They have multiple cars in

35:55their Speaker: household to go from inter-city Speaker: travel. Speaker: So

35:58they are not depending there. Speaker: Now come to the entry segment in entry

36:01segment. Speaker: Surely we have the CLA. Speaker: But there I mentioned

36:04earlier we Speaker: have no cars till next year Speaker: because the global

36:06demand is Speaker: strong. Speaker: So we have not. Speaker: If you take this

36:09out, there are Speaker: no other EVs available in the in Speaker: our

36:12portfolio, even in our Speaker: competitors. Speaker: Some of them have

36:15strong entry products, but none in the top. Speaker: They may have one or the

36:18other, but not selling in the top end, Speaker: but in the entry they have one

36:21or product which is their halo Speaker: product on the EV side, right? Speaker:

36:24I think we have to give time for full product portfolio to come, Speaker: uh,

36:28for customers who are buying second, third car, maybe they Speaker: can learn

36:32to live with an EV. Speaker: If they are staying in a housing Speaker: society,

36:35they, you need charging Speaker: capabilities, you need ecosystem

36:38Speaker: in place. Speaker: And I think it's one can take Speaker: the leap of

36:41faith, but I still Speaker: feel a couple of more months and Speaker:

36:44years, uh, for the next three, Speaker: four years, I think combustion Speaker:

36:47engine for first time buyers may Speaker: be a safer purchase to get

36:50into, Speaker: uh, I would say of depreciation, Speaker: right? Speaker:

36:52We've seen in the ultra luxury, Speaker: like I have a couple of friends,

36:55Speaker: I may or may not name the car, Speaker: maybe like look at the Taycan,

36:58Speaker: right? Speaker: Uh, and you know, that's, you have depreciated

37:02heavily because Speaker: generations are changing faster. Speaker: So what

37:06happens is that car is no longer available because the Speaker: next

37:08model has come with better technology, better stuff. Speaker: Also, when the

37:12new car demand Speaker: for EVs is weak, the used car Speaker: demand for EVs

37:15will be even Speaker: weaker. Speaker: What we have done there is also certain

37:18initiatives. Speaker: For example, one of the biggest misnomers in EVs after

37:21three Speaker: years, battery is gone. Speaker: Why? Speaker: Uh, well, the the

37:26the warranty on a EV is eight years. Speaker: But I say the warranty on a

37:30Speaker: combustion engine is only three Speaker: years. Speaker: So the second

37:32is we are used to Speaker: this laptop battery syndrome, Speaker: right?

37:35Speaker: It dies. Speaker: You feel your phone like the phone goes. Speaker: So

37:38we have introduced something called the HP certificate. Speaker: So when any

37:41Mercedes customer at Speaker: any time can come with this car Speaker: free of

37:45cost, we give him a Speaker: report on the health of the Speaker: battery.

37:47Speaker: You would be surprised. Speaker: Seventy thousand kilometer

37:50driven car. Speaker: Three year old car. Speaker: The health of the battery is

37:53ninety two percent. Speaker: Wow. Speaker: Because these are long term

37:56batteries, they actually. Speaker: If you take the residual value Speaker: of

37:59an EV at the end of fifteen Speaker: years, it has more value left in

38:03Speaker: it juice left than a combustion Speaker: engine car. Speaker: Because

38:05combustion engine, you have to moving parts, moving Speaker: parts, and you

38:08can't do much. Speaker: But an EV battery has more content. Speaker: So a

38:11couple of these startups Speaker: who are into the recycling space Speaker: on

38:14EV. Speaker: I think they have a big future with, um. Speaker: Santosh.

38:18Speaker: As I was hearing you and Sahil talk, I was realizing that Speaker:

38:22there's so much context switching you are doing, right? Speaker: You're

38:25talking about the brand. Speaker: You're talking about the industry. Speaker:

38:28You're talking about the business. Speaker: You're working with the

38:30government. Speaker: Uh, there is also technical features of the car that

38:33you're Speaker: thinking deeply about. Speaker: And then there's the financial

38:36aspect. Speaker: What have you learned in this Speaker: process from your own

38:40work or Speaker: from other CEOs that you've Speaker: worked with closely at

38:44Mercedes Speaker: about what it takes to become a Speaker: great CEO? Speaker: I

38:48think fundamentally, whatever Speaker: you mentioned, it all boils down

38:51Speaker: to people. Speaker: So, you know, these are all functional elements

38:54of knowing Speaker: the business and doing it. Speaker: I think that you can

38:56do it by Speaker: learning, reading, being aware Speaker: of it, by trying to

39:00get into Speaker: data. Speaker: And you can do, but, uh, the people is the core

39:04layer of what Speaker: we try to do. Speaker: And, uh, one of my earlier

39:08colleagues, Martin, he told me, Speaker: Santosh, if you want to, uh, you know,

39:12go short, you can run Speaker: fast, but if you want to go long, then take your

39:16people with Speaker: you and go slow. Speaker: I think that's very important

39:19Speaker: because you know, for me as Speaker: well, I'm a bit restless

39:22Speaker: sometimes and try to go push Speaker: things and try to execute

39:25things Speaker: faster. Speaker: And in that process, if I see that people not

39:29with me, then Speaker: that's also a red signal. Speaker: So for me, the biggest

39:32thing is I need to make myself aware. Speaker: What I've learnt is are people

39:36with me when I'm running are I Speaker: am running out of my passion, out of my

39:41desire to do things Speaker: and to shape up the brand, shape up the company

39:44and the people. Speaker: But, uh, is everybody along with me on the same

39:48pace? Speaker: And I think my success, the Speaker: brand success would be if I

39:52am Speaker: able to take everyone along, not Speaker: just the immediate

39:54colleagues, Speaker: but our dealers, partners, Speaker: suppliers, the

39:57ecosystem, they Speaker: need to have the same vision, Speaker: the same

40:00passion that I am able Speaker: to do. Speaker: So I think that's something

40:02that I clearly learnt also by Speaker: observing, by discussing with a lot of

40:06successful colleagues of Speaker: mine as well, that they are able to take

40:09people along, good times Speaker: and bad times as well. Speaker: And what's

40:11the playbook for taking people along? Speaker: Like, what are some of the

40:14tangible three or four things Speaker: that as CEO, you feel any CEO must do so

40:19that they carry the Speaker: team with them? Speaker: First thing is trust.

40:22Speaker: And I and I, this has been my mantra always. Speaker: I start with

40:27trust unless it's proven. Speaker: I don't wait for trust to be Speaker:

40:30developed because I Speaker: fundamentally, I believe that Speaker:

40:32everybody is coming inside to Speaker: this office, including my Speaker:

40:35partners, to do a good job and Speaker: to ensure. Speaker: And they are equally

40:39passionate Speaker: like me, so I trust them with Speaker: that. Speaker: So I

40:42think that and when you Speaker: give that trust, you get even Speaker: more

40:45back because then they feel Speaker: even more responsible to be Speaker:

40:47there. Speaker: The second for me is empathy, Speaker: you know, and that's

40:50something Speaker: we need to be a bit deeper, uh, Speaker: in there, as long

40:54as people have Speaker: the right intent and you are Speaker: trusting and, and

40:57you have to be Speaker: empathetic because they come, Speaker: everyone

41:00comes from different Speaker: backgrounds. Speaker: Uh, the mornings

41:03are very different for people. Speaker: The evenings are different. Speaker: The

41:05phone calls that they Speaker: receive during the day can Speaker: change what

41:08their mood and swing Speaker: can be. Speaker: They are very capable leaders

41:12and people, but they may be Speaker: going through different phases in their

41:16life, good and bad. Speaker: So for me, trust and empathy, I think they have

41:19formed very core Speaker: pillars of are taking people along in this journey.

41:23Speaker: Yeah, I would have thought that Speaker: you would have said some

41:25Speaker: tangible stuff, but really, Speaker: you've gone to the heart of the

41:28Speaker: thing. Speaker: Uh, Santosh, when you think Speaker: about your own

41:32career journey, Speaker: and we were talking briefly Speaker: about how you

41:36think about, uh, Speaker: your own career into the future, Speaker: how do

41:40you think about Speaker: retirement? Speaker: Uh, what comes to mind?

41:43Speaker: Like how do you, how do you see yourself, uh, contributing to Speaker:

41:48Mercedes, to the industry in the next decade plus? Speaker: Uh, or do you have

41:53like a date Speaker: that you're working backwards Speaker: from? Speaker: Wow.

41:56Speaker: That, that, that used to be, you know, I recently turned fifty,

41:58Speaker: uh, actually last month, in fact, and two months back. Speaker: And

42:03then the thought started, oh, is it now on the negative Speaker: ten years left?

42:06Speaker: Because, you know, I work in a Speaker: company, sixty years is the

42:09Speaker: retirement age. Speaker: And then what you try to do and then a

42:11couple of days went back. Speaker: How do I pace myself? Speaker: When you open

42:14Instagram, all you guys say how to retire, how to Speaker: retire, what to

42:18do, how to earn, what should your purpose, how to Speaker: calculate it,

42:22what needs to be done and all. Speaker: And then you need what corpus and that

42:26kind of thinking. Speaker: And then I said, and then I started thinking,

42:29calculating Speaker: too much to pace myself, etc. then I said, I spoke to

42:33another Speaker: colleague of mine. Speaker: He's our CFO and he's a German.

42:36Speaker: So he said, hey Santosh, you know, and he also turned fifty, Speaker:

42:40by the way, last month. Speaker: So. And he said, no, no, I have a longer runway

42:43in Germany. Speaker: The retirement is sixty five. Speaker: I said, this guy is

42:46thinking differently. Speaker: And then I why should I think just because this

42:49company has a Speaker: certain rule, I will. Speaker: I stop working because

42:53the ill effects of stopping working is. Speaker: Maybe I will not take care of

42:56Speaker: the health the way I am to take Speaker: care of. Speaker: I am already

42:59trying to make decisions based on an end date. Speaker: You are carrying yourself

43:02to a Speaker: certain date, to a date, to a Speaker: date. Speaker: So and I

43:04said, I don't do that. Speaker: I, I never thought like this even a couple of

43:07months back. Speaker: Why should I think I said I may be retired at sixty five.

43:11Speaker: So let me keep the goal posts away. Speaker: So this entire retirement

43:14thing Speaker: has gone out of my head now, Speaker: because I am saying I'll

43:17Speaker: continue to work because if I Speaker: work, I'll, I'll take care of

43:19my Speaker: health. Speaker: Because if without which I can't Speaker: work, I

43:22will take care of Speaker: family. Speaker: I will ensure that my mind is

43:26always more positive. Speaker: I am having a long term horizon for decision

43:29making. Speaker: I am working for a company where Speaker: it's like a ship

43:32you start Speaker: steering. Speaker: Today the. Speaker: By the time the ship

43:35takes the. Speaker: The the. Speaker: The right course or the wrong Speaker:

43:38course, it takes a couple of Speaker: time. Speaker: Right? Speaker: It is not

43:41like a car steering wheel very quickly. Speaker: It's very responsive. Speaker:

43:44So if as leaders, we have short term and I won't say ten years Speaker: is short

43:48term, but if you don't have that fifteen year, thirty Speaker: year thinking,

43:51then your decision making is very colored. Speaker: Maybe at that time

43:54that should never come into a leader. Speaker: So I, I therefore define this

43:58retirement concept and I said, I Speaker: will at least work till sixty

44:02five, hopefully health permits, Speaker: everything else permits and ecosystem,

44:05but it need not be. Speaker: But I will continue to work, whether it's here or

44:08wherever. Speaker: But I want to work, and that way Speaker: there is no urge

44:12to, you know, Speaker: either make a corpus and say, Speaker: no, no, no, I

44:16need this big Speaker: moolah there. Speaker: And I think life has been kind.

44:19Speaker: God has been kind. Speaker: Something will come out of it. Speaker:

44:21Yeah. Speaker: It's not easy because, you know, I, I would argue, Santosh, our

44:24Speaker: generation grew up to a calendar almost that you graduate at

44:28this Speaker: age, then you get married at this age, have kids by then and

44:32Speaker: so on and so forth. Speaker: And I think breaking out of that

44:35Speaker: into our own head is very Speaker: important. Speaker: True, true.

44:37Speaker: And, you know, when we think about retirement and it's very Speaker:

44:40topic that's very close to us, one of the questions is that how Speaker: much

44:43corpus is enough. Speaker: And that comes not from the Speaker: targeting of

44:47the corpus, but Speaker: from the fact that we really Speaker: need to have

44:50that conversation Speaker: and be thoughtful about, uh, how Speaker: I'm

44:54planning to work, uh, work Speaker: lives are extending, uh, thanks Speaker:

44:59to God. Speaker: And, uh, like healthcare, we have a longevity much,

45:02uh, more. Speaker: And hopefully we are able to contribute back, in the journey

45:07Speaker: of creating wealth for your own self as a salaried professional.

45:12Speaker: What are some of the financial decisions that you look back on?

45:15Speaker: Say that these were the things that worked well for me, uh, and

45:18Speaker: maybe will be helpful for others to learn from. Speaker: So, uh,

45:22firstly, uh, you know, I, I mentioned for me, wealth is Speaker: one is money

45:26and also what kind of quality of life I am leading. Speaker: Uh, and that

45:30includes from the house I stay to, uh, to the Speaker: vacations I do and the

45:34time I spend with my friends. Speaker: So it's a, it's a combination. Speaker:

45:37So, but on the pure wealth from a monetary perspective, one Speaker: thing

45:41is I started to keep something aside always. Speaker: Uh, it was never that I

45:45spent my entire income, uh, on what I Speaker: want to do. Speaker: So I

45:48always had a tendency to keep a bit. Speaker: And I started early. Speaker:

45:52So that again, held me from a sheer compounding maths, uh, to Speaker: build

45:56a certain. Speaker: But, you know, I never keep Speaker: looking at what is

45:59that net Speaker: worth or what is because then Speaker: that you are again

46:02steered Speaker: towards a different decision Speaker: making and. Speaker:

46:05And there is also agreed to certain. Speaker: I come from a humble middle

46:08class background. Speaker: I worked through my life and I think as long as

46:12you are able Speaker: not to add expenses which tomorrow you can't take

46:17out, uh, Speaker: then you are sorted. Speaker: Actually, to a large extent, we

46:20have a very simple life. Speaker: A healthcare is expensive for sure, but

46:23then thankfully there Speaker: is good insurances today available to cover you

46:27to a very Speaker: large period of time. Speaker: So the moment you take that box

46:30off wherein that premium and Speaker: that stuff is not going to break the

46:33bank, and that's going to Speaker: take care of something where you are not

46:36dependent either on your Speaker: kids, neither on your friends, neither on

46:39anybody else. Speaker: So that one big portion is greater. Speaker: Then you

46:42have a house with you, uh, to take care of, uh, you Speaker: know, a place to

46:47live. Speaker: And then I think it's, it's how do you adjust? Speaker: How do

46:50you spend? Speaker: And I am continues to spend on what I want to do. Speaker:

46:54Uh, you know, I love watches. Speaker: I love to go with friends. Speaker: I was

46:58in Ibiza, by the way, uh, two months back with my friends. Speaker: The

47:01credit card bills are haunting me now, But the thing Speaker: is, I. Again, we

47:05all thought even my my group of friends Speaker: also, hey, you know, it's

47:09again, that, uh, mentality, okay, Speaker: whether or not. Speaker: But he

47:12said, come on, we are not going to come each time. Speaker: And then we, we, we

47:15went to the Speaker: best of the places and did Speaker: stuff. Speaker: What we

47:19want to do at the same time, investing is important. Speaker: I would not, uh,

47:22and then you Speaker: have to build your portfolio, Speaker: but, uh, the target

47:26based Speaker: approach where you're building Speaker: enough pressure on

47:29your own Speaker: self. Speaker: Yeah. Speaker: Because I, in my, what I

47:32realized is I had certain I, I Speaker: would not lie. Speaker: I have certain

47:35milestones. Speaker: I thought at some point even a Speaker: fifty lakhs would

47:37have been Speaker: great. Speaker: And then at some point you would say one

47:40crore, five crore. Speaker: That is just because your lifestyle is changing,

47:43right? Speaker: And then so therefore, if you Speaker: work well and, uh, you

47:48will the Speaker: corpus and you are investing in Speaker: a, with a very

47:51long term view, Speaker: uh, by diversifying, by Speaker: checking, I

47:54would never say Speaker: that. Speaker: Don't look at your portfolio, keep

47:58making those adjustments, Speaker: but not from just that I have to meet that X

48:02crore for target and Speaker: then that's a cut off. Speaker: Then I just

48:05go for some Hawaii and then I party because it Speaker: doesn't happen like

48:08that. Speaker: You know a person who works especially for guys for me, I

48:12Speaker: can say I need work as well. Speaker: I need to keep my own, uh,

48:16energy alive. Speaker: It's part of the food supplement that I have. Speaker: So

48:20I can't do without work as well. Speaker: There's so much to learn from

48:23Speaker: your journey around business, Speaker: around leadership, around how

48:27to Speaker: be empathetic and work with Speaker: people. Speaker: Uh, thank you

48:30so much. Speaker: We've really enjoyed this Speaker: conversation, and thank

48:32you for Speaker: being such a warm and gracious Speaker: host at the Chakan

48:36plant at Speaker: Mercedes. Speaker: Uh, I'm also relieved that I had Sahil by my

48:40side because, like I Speaker: was telling you, uh, you know, I know as

48:44much as, uh, cardiology Speaker: as I know about cars. Speaker: So, uh, I

48:47think this has been a Speaker: fascinating learning experience Speaker:

48:50for me. Speaker: Yeah. Speaker: Thanks for coming in. Speaker: And we remain

48:52connected. Speaker: Thanks. Speaker: Thank you so much. Speaker: Thank you.

48:54Speaker: Santosh.