All throughout Monday people on Twitter have been talking about a top Mercedes India executive for his take on the savings mindset in the country. Santosh Iyer, the Sales and Marketing Head of Mercedes-Benz India, has received a lot of flak for saying that people’s investments in Systematic Investment Plans (SIPs) in India is eating into the potential profits that Mercedes could be making selling luxury cars. The latest person to join the list of people who disagree with Iyer, is Zerodha co-founder Nithin Kamath.
In an interview given to Times Of India, Iyer is quoted saying that, unlike the West, people in India have a mindset where they save not just for themselves, but for their kids as well. “The Rs 50,000 that a potential customer invests into an SIP, if diverted towards the luxury car market, will see business explode,” Iyer, set to be the MD and CEO of Mercedes-Benz India from January next year.
Nithin Kamath, in two tweets, questioned the stand that Iyer had taken on the savings mindset in India. Referring to the general economic condition of countries with high debt, Kamath wrote, “A saving mindset is what will help us in times like now when countries that have borrowed heavily are getting screwed? In a world of rising interest rates, this will probably get much worse before it gets better for them.”
A saving mindset is what will help us in times like now when countries that have borrowed heavily are getting screwed? In a world of rising interest rates, this will probably get much worse before it gets better for them. 1/2 pic.twitter.com/PhpEu7onS0— Nithin Kamath (@Nithin0dha) November 28, 2022
Highlighting that cars are a depreciating asset, Kamath rhetorically asked “Isn’t slow & steady growth much better (like compounding in investing) than debt-fuelled explosive growth where people borrow to buy depreciating assets? Neither good for customers nor for businesses in the long run.”
Kamath also added that he hoped it was a “misquote and not what it reads.”
Isn’t slow & steady growth much better (like compounding in investing) than debt-fuelled explosive growth where people borrow to buy depreciating assets?Neither good for customers nor for businesses in the long run.Btw, I hope this is a misquote & is not what it reads. 2/2
— Nithin Kamath (@Nithin0dha) November 28, 2022
The Zerodha co-founder is a known supporter of investing in SIPs, which his company facilitates. In a recent interview with Moneycontrol, he had even advised young people to start by investing in a fixed deposit and then move to putting their money in mutual funds via SIP.
“The idea is to just start off with a fixed deposit, once you have a certain amount of capital then maybe they can start investing a small portion of it into mutual funds… start a SIP (Systematic Investment Plan). Then they can pick up a low-cost index fund and start investing monthly after,” he was quoted saying.
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