Switching to petrol vehicles will not resolve issues related to pollution as it has 25 per cent higher CO2 levels than diesel,Roland Folger , Managing Director and CEO, Mercedes-Benz India told The Hindu in an interview.
He said the year ahead does not look as easy as anticipated for the German auto maker due to decisions such as the ban on diesel vehicles of over 2000cc in the national capital.
However, the company is aiming for a good two-digit growth.
How has been your stint in India so far?
It has been really exciting four months. In fact, it does not feel like four months, feels more like one month…the time is passing very fast but that is also because we are seeing so many exciting things at the moment….last year we came back to number one position in India…meeting, slightly exceeding our sales target.
But then again, a new year is a new start. You have to prove yourself again to the customers. It is not as easy as anticipated with what is going on in Delhi. But I think we have a few good solutions on short-term as well as long-term basis.
What are the solutions?
Naturally, one is switching more petrol versions from other markets in India into Delhi. In the long term, we need different solutions to this issue.
We can not have a discussion like that again towards the end of next year. So we are talking to the ministries involved about solutions that will give mid-long term better air conditions.
I think, there are a lot of things that can be learned from other countries as well. Whether you look towards the U.S. or Europe, we have been going through same kind of experiences. We had very bad condition of air over there as well. We significantly reduced the emissions. We appropriately combined that with, for instance, increasing the quality of our fuel, now to Euro 6 standard…That is a solution that we have applauded very much by being moved forward to 2020 now in India. We could do this earlier…If there is the right fuel quality available… We would be able to bring in new technology, much better consumption level and much better emission level at a much earlier stage.
What are your views on sudden policy changes?
It’s really disruptive. We have a lead time normally in our planning of 6-9 months depending on different types of vehicles.
As far as our SUVs are concerned, you are getting your parts from as far as Germany or in our case sometimes the U.S. Naturally, you have a very long lead time.
So, to do any adjustments in short-term is really difficult. Germany has been quite helpful from our perspective in enabling us to do more switches from diesel to petrol.
But I have to say we don’t feel entirely comfortable with it because we know from our experience in Europe that by switching from diesel to petrol you are increasing CO2 levels. Petrol cars by definition have roughly 25 per cent higher CO2 levels.
We realise that government has signed some promises in Paris in order to safeguard overall global warming or global change and this does not make it easier. We just want to make sure that people understand that just this switch will not really resolve your issues.
It needs to come with much more fundamental change in the overall direction.
If you look at other countries and how they have approached it… the U.S. more with a view on petrol because they don’t have high petrol prices and can afford it. Europe, which has to import all their oil and gas, was under pressure and therefore started to go the diesel way. If the whole of Europe can go the diesel way, it is difficult to understand why that cannot be a continued direction also for India.
When the SC decision on banning 2000cc and above diesel cars in Delhi came, Mercedes gave a very strongly-worded reaction even going to the extent of saying there could be job losses. Does this still stand?
That was a time of turmoil. That was a time of insecurity. In the meantime, we have had positive discussions with the various stakeholders. Very positive discussion I have to say, at least we have the feeling that we are being listened to.
And also I think in the beginning there was a lot of miscommunication… so hopefully we can bring our points across as well on this issue and find a more long-lasting solution.
The directives were given so that health of the general public out on the roads is much more supported. In that case it made a lot of sense to come up with ban like that…but what we felt was little bit less appropriate, the fact that it basically affected mainly us and our relative segment.
Other car makers were not so much affected. If you see now, Mahindra is bringing down their engine sizes down to 1.9 litre. The question is that do we now really assume that this can help with our emission problem that everybody goes down to 1.9 litre engine, because this will happen next. But this is not the solution to our problem.
So let’s look first at what the real issues are and then quickly come up with the solutions. We are happy to provide dialogue and input in that solution. We have worldwide experience with these issues.
Do you think there will be job losses?
Yes, no job losses. But, naturally should now this regulation continue, should it also be then taken up in some other states and cities then nobody knows what’s going to happen. And that will be a shame because I still believe it will not have any of the positive effects expected
Can we see Mercedes at the top again at the end of this year?
Of course. We have a very strong customer focus and orientation that we are bringing to the market in 2016. In addition, we will be bringing a total of 12 new vehicles to the market this year. Some of the products that we are launching like the GLC don’t even have the predecessor. So it’s going be exciting.
We expect to see a good two-digit growth this year.
