Mercedes-Benz’ Plans to Dominate India

Clarissa August 26, 2011

Mercedes- Benz has been the unparalleled leader in luxury car industry in India, for the past 15 years before BMW dethroned them in March of last year. Even after Benz posted an 80% growth, the other German brand led the pack after just five years of entering the shores of India.

But the Mercedes-Benz brand will not give way, as they are now trying to win the market for small cars and luxury vehicles in the country. This effort began when they put Peter Honegg as the new managing director and chief executive officer with a goal to make the brand fresh and to cater for the younger market. He commented, ““Mercedes is the oldest as well as the youngest automobile brand in the world,” and explained it further, “Our company was established 125 years ago and we have constantly re-invented ourselves. We own 80 per cent of all auto patents worldwide, we have technological expertise. What we have to do now is to communicate that to our buyers.”

Mercedes-Benz is also thinking of bring the smart cars to the country very soon because as of now, BMW is preparing to release the I-Series by the end of 2012 and Audi already checked the market if they could get the A3 launched as well. The company is also thinking of bringing the A and B class hatchback to India in a couple of years, to follow the success of the C, S, and E classes.

Another strategy that the luxury brand is planning of is localizing production of these vehicles. This will bring the price of the vehicles down. There are existing suppliers that source the components of the C and E class cars but right now they are thinking of localizing completely built units as well. A paint shop will be operational by the second half 2012 as Benz is investing Rs 250 crore for it.

Indian Mercedes-Benz is also studying the option of leasing the cars to improve sales. They expect to get revenue when the used Mercedes at Inchcape Mercedes-Benz are sold under Certified Pre-Owned Program once the lease ends. As Honegg said, “We would have cars which are between three to four years old with us for sale in the used car market. We can get more customers into our brand at a lower entry-level through sale of pre-owned cars.” In addition to all these, the company will set up a brand center, the first of its kind in the country’s capital by the end of this year. In this center, 40 Mercedes-Benz cars will be on display.

The company is indeed working hard to improve the numbers in the country. With all these efforts and strategies in line, the brand will surely see exponential growth in India, as it has done in other countries.

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