The German war in the Indian luxury market is the most hotly discussed topic on various automotive channels. The current leader – BMW is outselling the rivals Mercedes and Audi since 2009.
Of course, some accredit BMW’s success to its corporate models. Others blame it on the popular compact crossover –X1 which has a unique standing in its segment. But a sale is a sale. One cannot take away BMW’s humongous success in India.
The Tri-star has a 15 year lustrous history in India. In fact, the word ‘Mercedes’ almost synonymous to a luxury car here in India. Despite that, Mercedes was actually the second best selling luxury brand in India since 2009.
Mercedes Benz India invited a select group of automotive bloggers yesterday to tour its Chakan CKD plant and engage in a discussion with the senior management on products, strategy, competition and the market dynamics. Let’s dive straight into what company officials had to say to the question we asked them. Some of these questions were provided by Indian Autos Blog readers through Facebook, tweets and mails.
Demise of Maybach – More Joy or No Joy?
The plug on the Maybach brand is pulled next year and the senior management believes this is a good decision. When Maybach was deciding on its branding before its launch early last decade, country heads from Mercedes Benz all over the world voted for Maybach while some, feeling the unknown roots or meaning of Maybach would make its own life difficult, voted for Mercedes Maybach. The decision on the independent branding could have cost Maybach dear.
As Mercedes India plans to restore its long lost era of supremacy, the carmaker is betting big on local assembly to reduce the cost of the purchase. The company is planning to invest Rs 350 crores in the Chakan plant to add two more production lines.
These production lines will be used in the roll out of 4-5 new models which will be assembled in India instead of being imported as a CBU.
The models that are being considered for local assembly include long wheelbase versions of the C and the E Class (finally!), soon-to-come B-Class MPV, A Class hatchback , M-Class (2012) and the GL-Class (2013). The ‘GLC’ – a small crossover currently being developed to challenge the BMW X1 is also under consideration for local assembly.
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The German from Stuttgart plans to challenge the supremacy of BMW starting 2012. Mercedes Benz plans to rejig its ‘Old money’ image by showcasing the brand’s dynamic and sporty capabilities. The major attraction at the Mercedes Stall will be the concept A-Class much revered for its expressive design and cool technological features.
Giving company to the Concept A Class will be SLS AMG GT3 super car and also its DTM C-Class car so that petrolheads could get some bang for their buck. AMG lovers will definitely see the entire AMG portfolio as well as the some more details about the soon-to-be-launched Mercedes-Benz-JPSI Performance Driving Academy.
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At the launch of the new Mercedes Benz C-Class here in Delhi, the top management discussed not just about the facelift but many other issues pertaining to Mercedes Benz cars for India and the roadmap in 2012. With the inaugural Indian GP now just weeks away, Mercedes is eagerly looking for ways to piggyback on the F1 team’s participation to reshape the brand and transform the way India looks and thinks about a Mercedes Benz.
Mercedes Benz sees the F1 race as an opportunity as the other two German rivals do not participate at the highest level of motorsport.
Here are some of the information IndianAutosBlog.com was able to gather from the press conference
- Mercedes’s key attributes are Luxury and Sports performance, but in India Merc is known for its luxury more than its sports pedigree. The association with F1 in India and Buddh circuit in Noida will play important roles in the coming months as it repositions itself as luxury & sports brand. A new lease of marketing activities have been planned to this effect.
- Merc wants to tap every ounce of the demand during the festive season and will do so by launching two vehicles in the next four weeks (CLS and variants of existing cars?)
- It achieved 40% growth in first seven months of the year compared to the corresponding period last year
- Merc in India is present from 1997 and has over 35,000 cars running on our roads
- With 55 Service stations nationwide followed by a few more in the coming months Merc has the largest A.S.S network amongst the luxury car manufacturers.
- Two additional service stations coming up in Delhi very soon to reduce the burden of increasing vehicles on current service infrastructure
- Merc Portfolio Sales ratio in India: 2/3 Diesel cars and 1/3 Petrol Cars – so it isn’t only the Swifts and Figos that are finding petrol unfavorable.
- C-Class portfolio Ratio: 45% Petrol cars and 55% Diesel Cars, Petrol cars ratio increased because of availability of all new CGI technology – Marketing speak or legitimate claim? – you decide.
- Merc currently sells 200-250 units a month, Targets 300-350 units (overall) with new C Class.
- The new C Class has been launched in India in a period of 5 months off from its global launch. RHD conversion took time.
- No Plans for SMART cars in India, Merc doesn’t see a market for such products.
- Total of 600 CR Investment in Chakan Plant with lots of available space to boost capacity as and when required.
- More CBU-route cars expected to come through CKD route, Merc hinted that a couple of SUV’s expect it to be assembled in India next year. If you have been reading IndianAutosBlog, you’d know they are referring to the new M & GL Class.
What are your thoughts on Mercedes Benz India’s roadmap?
Indians by nature like to own stuff than rent it. We grow up with an aspiration of owning our own house and even our own car. But things are a bit different internationally where many people prefer to lease their cars. The benefits are quite evident:
• You don’t have to take a loan to pay a huge amount upfront
• You don’t have to worry about the servicing the car or spend on maintenance
• You have the option of getting a new car when your lease is over
• The ownership experience is totally hassle free
Mercedes Benz India is planning to introduce the leasing concept in the luxury car market for the first time. They are preparing to commence leasing vehicles to consumers in the Indian market by the end of this year. However, if you are an individual then there is some bad news for you. Mercedes is only planning to lease to corporate companies for the time being. If the venture attains a certain size, then individuals will be considered.
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After the kickass discount of Rs 45,000 – Rs 55,000 offered on the City, Honda India has managed to breathe some life into City’s sales figures. Honda India said that the reason for the price cut was heavy localization due to which they were able to reduce the cost of manufacturing. Well, it seems other manufacturers are also taking a leaf out of Honda India’s book and focusing on localization.
Mercedes India is facing intense heat from BMW and Audi in the luxury market. With Audi catching fast on Mercedes, their second spot is also in an endangered situation now. Now it has been reported that the Mercedes Benz is increasingly looking at widening its portfolio of products manufactured in India to cut costs and shore up volumes.
Peter Honegg, managing director and chief executive officer of Mercedes Benz India Ltd (MBIL) said the company will assemble the well accepted M-Class in India shortly. We’re dead sure that he’s talking about the next generation model, photographs of which was released online last month. The local assembly will be part of the model changeover strategy.
In order to increase localization, Mercedes India will focus on its existing supplier base from which they source major parts for the C and E class. Currently, from the Mercedes portfolio, the C and the E class are heavily localized with Indian components making up to 40-50% of the total product.
In order to increase localization levels, the company has also invested Rs 250 crore to set up a paint shop, which would be operational by the second half of the next year.
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After losing number 1 position in the luxury car market to BMW, Mercedes India has come under threat from the third German – Audi. In an effort to regain its market share, Mercedes has adopted the strategy of Frenzy Launches. The company is launching a new car or a variant almost every month. Mercedes India is in talks with their headquarters in Stuttgart to bring in small cars from the [ Read More ]
The German war in the Indian luxury market is the most hotly discussed topic on various automotive channels. The current leader – BMW is outselling the rivals Mercedes and Audi since 2009.
