A comment by the top executive of Mercedes-Benz India that mutual fund (MF) systematic investment plans (SIPs) are eating on luxury car sales has taken social media by storm.
The comment has led people to highlight the ‘savings mentality’ of Indians and figure out the right SIP formula to buy a Mercedes-Benz car.
“A saving mindset is what will help us in times like now when countries that have borrowed heavily are getting screwed? In a world of rising interest rates, this will probably get much worse before it gets better for them,” said Zerodha co-founder Nithin Kamath.
Nilesh Shah, managing director of Kotak Mahindra AMC, said SIPs can create financial freedom for investors. “At Rs 50,000 EMI it isn’t possible to buy a luxury car. At Rs 50,000 SIP for a reasonable time, it is possible to buy a luxury car,” he said.
Santosh Iyer, Mercedes-Benz India’s next managing director and chief executive, said on Monday that SIPs were coming in the way of the company’s growth in India.
“They (SIPs) are our competitors. I tell my team if you are able to break that (SIP investment) cycle, then exponential growth is a given,” said Santosh Iyer, sales & marketing head of Mercedes-Benz India in an interview to the Times of India.
However, for most Twitter users the comparison did not make sense and they pointed out that the middle class that uses the SIP route for their financial goals.
“Cheapest Mercedes in India starts at Rs 50 lakh and comes with an EMI of Rs 80,000. India’s average SIP amount is Rs 3,000. Either Mercedes is coming with a Rs 5 lakh luxury car or they don’t know India as yet,” said a Twitter user.
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