Mercedes-Benz India is the Indian subsidiary of the German luxury carmaker Mercedes-Benz, one of the world’s most prestigious and well-known automotive brands. With a rich heritage spanning more than 100 years, Mercedes-Benz is synonymous with luxury, performance, and innovation. The company’s reputation for engineering excellence and cutting-edge design has made it a leader in the global automotive industry. In India, the luxury auto manufacturing industry is a niche segment that caters to affluent and discerning buyers who demand nothing but the best. Despite its relatively small size, the Indian luxury car market is growing at a healthy pace, thanks to rising incomes and an increasing number of high-net-worth individuals in the country. As a result, India’s luxury auto manufacturing industry is becoming more competitive, with major players like Mercedes-Benz vying for a larger share of this lucrative market.
In an exclusive interview with Vyankatesh Kulkarni, Executive Director of Mercedes-Benz India shares about Digitalisation, EVs, and Sustainable Manufacturing.
What motivated Mercedes-Benz to focus on digitalization, EVs, and sustainable manufacturing? Tell us about Mercedes-Benz’s journey into electrification and technology-driven ‘Smart Manufacturing’ and Industry 4.0 practices of the future.
The manufacturing of the EQS 580 4MATIC in India represents a significant milestone for Mercedes-Benz, underscoring our advanced manufacturing capabilities and unwavering commitment to the Make in India initiative. This occasion introduced India’s first luxury electric vehicle and positioned Mercedes-Benz India as a key player in the global electric vehicle manufacturing network. Our plant became the first outside Germany to assemble this remarkable vehicle, highlighting our global manufacturing prowess.
As we embarked on our electrification journey in 2022, our focus extended beyond vehicle production to transforming our manufacturing infrastructure. We made comprehensive adaptations across mechanical, electrical, and various other processes. The logistics supply chain, a critical component, underwent significant enhancements to facilitate the efficient production of electric vehicles. Ensuring the seamless integration of batteries, a hazardous process, necessitated thorough evaluations and the implementation of enhanced safety measures. Our skilled workforce received specialised training to handle the complexities of battery systems, high-voltage networks, and emergency protocols.
Our aim was not only to upgrade infrastructure but also to create highly flexible manufacturing lines. These lines are designed to accommodate multiple vehicle models, seamlessly transitioning between internal combustion engines and electric cars. From iconic models like the S-Class and E-Class to innovative offerings like the EQS and luxurious Mercedes Maybach, our plant exemplifies the agility and adaptability required to meet the diverse demands of the future.
Mercedes-Benz India’s transformation journey goes beyond infrastructure upgrades. It represents a holistic approach to elevate our manufacturing capabilities to new heights. Our unwavering focus remains on safety, flexibility, and the ability to cater to evolving vehicle needs. By leveraging state-of-the-art facilities, optimized processes, and a highly skilled workforce, we are spearheading the future of manufacturing and cementing our position as leaders in the electrification revolution.
Can you tell us about the company’s digitalization strategy? How does it help Mercedes-Benz remain competitive in today’s market?
Our electrification strategy is a global vision, defined and rolled out with precision from our headquarters. Aligned with Ambition 2039, we have a comprehensive roadmap spanning one year, three years, and five years to introduce electric vehicles (EVs) in India. The journey commenced in 2020 with the launch of our first EV, the EQC, which garnered positive feedback from early adopters who embraced this transformative technology. Building on this success, we followed up with the successful introduction of the EQB and our luxurious flagship, the EQS. We already have four EV models gracefully cruising on Indian roads, with more on the horizon.
While our product lineup reflects our commitment to electrification, we recognize the importance of a robust charging infrastructure. As India’s largest luxury original equipment manufacturer (OEM), we have established an extensive ultra-fast charging network to support our EVs. With over 100 22-kilowatt AC chargers and 40 units of ultra-fast chargers strategically located across the country, we ensure convenience and accessibility for our customers. Integrating plant, product, and charging networks is vital to strengthen our electrification offensive.
Furthermore, we prioritize the development of highly skilled professionals in the field of electric mobility. A capable workforce is integral to driving our electrification strategy forward. By nurturing talent and empowering our teams, we aim to remain at the forefront of technological advancements and shape the future of the automotive industry.
At Mercedes-Benz, we embrace our role as frontrunners and strive to surpass the technological curve. We are committed to defining the future of both products and markets. With a relentless focus on innovation and an unwavering dedication to providing cutting-edge solutions, we are well-prepared to lead the electrification revolution in India.
Mercedes-Benz India is fully equipped to pave the way for a greener and more sustainable future in the automotive landscape through our comprehensive approach encompassing plant optimization, an expanding EV portfolio, a robust charging infrastructure, and a skilled workforce.
Mercedes-Benz has announced its commitment to becoming fully electric by 2030. How is the company working to achieve this goal, and what challenges have you faced along the way?
As we embark on the ambitious journey toward achieving an all-electric future by 2039, we recognize that challenges lie ahead. Guided by our overarching vision of Ambition 2039, our electrification strategy encompasses the entire supply chain, requiring collaboration and commitment from all stakeholders, including tier 1 suppliers and raw material providers at tier “n”.
One of the key challenges we face is transitioning from internal combustion engine (ICE) vehicles to electric vehicles (EVs). Understanding that a sudden and complete shift is not feasible due to varying customer needs, our focus remains on customer satisfaction. We strive to cater to both ICE and EV segments, ensuring a seamless transition while meeting diverse customer expectations. Managing this parallel objective demands careful coordination and effective management.
By 2025, we aim to dedicate at least 25% of our sales to electric vehicles, further adding complexity to our journey. We actively engage with our business partners and suppliers to overcome these challenges, fostering collaboration and mutual support as we navigate this transformative era together.
Our electrification drive encompasses various aspects, including product development, plant optimization, process refinement, and nurturing a skilled workforce. Each facet presents unique challenges, but we remain committed to overcoming them. We approach electrification with a comprehensive and holistic mindset, aligning every aspect of our business with our vision for a sustainable future.
While the road ahead may be challenging, our determination and innovative thinking drive us forward. We continuously push the boundaries of what is possible, confident that through our unwavering commitment and collaborative efforts, we will emerge as pioneers in the electrification revolution.
Mercedes-Benz is fully dedicated to shaping a future where mobility is sustainable, efficient, and environmentally friendly. Together, we can overcome challenges and drive the transformation towards electrification, forging a greener and more prosperous future.
What steps has Mercedes-Benz taken to ensure that its electric vehicles are sustainable in production and operation?
When discussing sustainability, we consider it a complete umbrella term encompassing various aspects. This includes the product, production process, and supply chain, all aligned with our Ambition 2039. Regarding our product focus, we have ensured that our products consist of 85% or more recyclable materials. For instance, the components used in the EQS are manufactured with excellent resource efficiency, utilising recycled and renewable raw materials. Over 80% of the steel used in the EQS structure is recycled. Additionally, we utilise fishing nets and carpet scraps to create floor coverings and mats. Thus, as mentioned earlier, sustainability encompasses the product and production plant and extends to our supply chain.
How do you ensure your suppliers share your commitment to sustainability and responsible manufacturing practices?
When discussing Mercedes-Benz as an OEM, taking full responsibility for our product and production is undoubtedly challenging, but it remains within our control. However, we recognise that more is needed. At Mercedes-Benz, we share a collective vision of sustainability and have embraced the common mission of Ambition 2039 in collaboration with our business partners and suppliers. This commitment extends beyond our role as an OEM and encompasses our entire supply chain, including tier 1 suppliers and even those at the tier “N” level. By 2039, all entities within our supply chain must strive to achieve carbon neutrality across all operations. Suppliers not aligning with our common mission or sharing our overarching vision are automatically excluded from our RFQ (Request for Quotation) process. We consider them incompatible with one of the fundamental principles of our company.
In India, we adhere to the same principles and practices. Additionally, we have established annual targets and qualification ratings that consider sustainability initiatives and practices. Through quarterly and video audits, we assess and qualify suppliers with a dedicated focus on sustainability. As pioneers in sustainability, we consistently strive to be responsible manufacturers, and we firmly believe that being a responsible manufacturer goes hand in hand with being a responsible business partner. This ethos shapes our approach, wherein we encourage our suppliers and business partners to embrace our dreams, vision, and mission and actively collaborate with them through a governance model to ensure their realisation. It is no longer a mere aspiration; sustainability has become integral to our collective way of life alongside our business partners.
To exemplify this commitment, our manufacturing plant operates solely on green energy powered by our solar plant located in Pune. Encouragingly, some of our suppliers have followed suit, installing solar plants and increasing their reliance on green energy within their facilities. Other suppliers also embrace this trend, demonstrating our collective efforts in working together on this journey.
The pandemic has accelerated the shift towards digitalization and e-commerce. How has Mercedes-Benz adapted to these changes, and what future innovations can we expect to see from the company?
Mercedes-Benz is synonymous with innovation, and today I want to highlight our focus on sustainability and innovation within the context of transformation, electrification, and sustainability. While we won’t delve into our product and production innovations, it’s important to emphasize the collaborative nature of sustainability. We have numerous internal programs dedicated to sustainable innovations, including celebrating Green Week in December and Earth Day or Earth Week in April. These events provide a platform for young engineers to showcase their innovative ideas, file patents, and work towards sustainable outcomes.
However, innovation and sustainability cannot exist in isolation. Recognizing the importance of collaboration, we recently held a sustainability dialogue in India, with participation from policy and changemakers. Chaired by our Chairman of the Board, Ola Källenius, and our Board member for Integrity and Legal, Renata Jungo Brüngger, the dialogue served as the launch pad for our “beVisioneers” program. In collaboration with the DO School, a renowned organisation from Germany, this fellowship program seeks out young innovators between the ages of 16 and 28 with promising ideas for sustainability projects.
In India, we offer 30-33 fellowships dedicated to sustainability. The program extends over 12 months, providing comprehensive support for innovation. Each fellow is assigned a personal mentor, and structured programs enhance their journey. They also receive funding for their projects and need-based financial stipends. We aim to cultivate internal innovation for sustainability while harnessing the innovative potential of society to contribute to a sustainable Earth. The beVisioneers program has gained significant recognition and can be explored further through our social media channels. Its recent launch has already showcased impressive progress.
What do you see as the future of sustainable mobility, and how is Mercedes-Benz positioning itself to lead the way in this area?
As a luxury carmaker, Mercedes-Benz firmly believes sustainability is essential to true luxury. We have set a clear roadmap to achieve a carbon-neutral fleet by 2039, recognising that luxury must be experienced while being environmentally conscious. By 2025, our goal is for electric vehicles to account for up to 50% of our sales volume. Looking ahead to 2030, our vision is to transition to entirely electric vehicles wherever market conditions allow, aligning with our strong business commitment. By 2039, we aim to achieve carbon neutrality throughout our supply chain, including our tier “N” suppliers and raw material providers.
In our pursuit of sustainability, we are dedicated to conserving precious resources on a global scale. One of Mercedes-Benz’s primary objectives is establishing a circular economy, particularly for battery recycling. While we prepare for the future, we also actively promote sustainability in our operations. By 2030, we aim to meet over 70% of our energy requirements in production with renewable sources. Overall, we are well-positioned as Mercedes-Benz to lead this area. The journey continues, and we are committed to intensifying our efforts as we move forward.
Mercedes-Benz has gained significant recognition for its extensive research and development (R&D) capabilities. Can you provide some insights into the impressive work carried out in this domain?
Mercedes-Benz has established its largest R&D centre outside of Germany in India. With facilities in Bangalore and Pune, the Mercedes-Benz Research and Development India team actively contributes to various global projects. Their expertise spans mechanical and electrical design, software development, and other critical areas. It is with great pride that every Mercedes-Benz vehicle running on roads worldwide carries a touch of India, thanks to the valuable contributions made by our R&D team. Their efforts play a significant role in various aspects of Mercedes-Benz vehicles.