Mercedes Benz stands up to competition from BMW and Audi
Mercedes Benz stands up to competition from BMW and Audi
S-Class art edition rolled out
Mercedes Benz has rolled out its exclusive S-Class art edition recently. It is a part of a partnership with art auction house Saffronart for the promotion of arts in India. The tie-up is one year old. It aims to denote the sporty, luxurious and lifestyle statement associated with the marqee. It is priced at Rs.1.14 crore and carries a premium of Rs.19 lakh over the top end S-500. This special edition S-Class art edition has been branded as collector’s item. Only two cars have been sold in India so far. The car has hand-stitched white leather interiors, special black paint scheme and alloys, Harmon Kardon sound system and other features. Peter Honegg is the Managing Director and CEO of Mercedes Benz India.
Launching of C-Class sedan
Mercedes Benz has launched new C-Class sedan in New Delhi. The company also plans to launch more new products in the immediate future. The car is priced at around Rs.30 lakh. It comes with petrol engine with 7-speed automatic transmission. It enables reduced fuel consumption while delivering high output and torque for better driving pleasure. It has panoramic sunroof and is equipped with comprehensive safety package like for example ‘Attention Assist’ and ‘Parktronic’ including parking guidance. It is loaded with latest luxury and comfort features. It has intelligent lighting system. Its LED daytime running lights add to its exterior design. The company is targeting young executives and businessmen for the car. It plans to sell around 275 cars in the year. C-Class is the cheapest available car from Mercedes Benz.
Introducing trucks in India
Mercedes Benz is contemplating introducing its trucks in India. The company feels that the truck market has huge potential as the delivery of goods for all the infrastructure work in India will have to be done by trucks. The company wants to make its costly Mercedes Benz cars more affordable to the Indians. Reducing the price is not possible in the luxury car segment. The only other way is to encourage leasing of its cars, which could make its cars affordable to more people. Mercedes Benz is the official automobile partner for the first Formula One race in India beginning in October. Mercedes Benz has unveiled SLK-350 in New Delhi. It is priced at Rs.62 lakh. It comes with ‘Magic Sky Control’ panoramic vario-roof for the first time. It is powered by a 3.5 litre petrol engine. It has ‘Blue EFFICIENCY’ measures that ensure optimal performance and environment compatibility. Earlier, Mercedes Benz sold 3 or 4 SLK-200 cars a month in India.
Lost top position to BMW
Mercedes Benz sold 5819 cars in India in 2010. This was the company’s highest ever sales figure in India. In 2009, Mercedes Benz lost its top sales position in luxury cars segment to BMW. The company plans to bring cheaper models to woo first time luxury car buyers in 2013. BMW’s best selling model in India is XI. It is a compact sport utility vehicle assembled locally in India. Its price starts at Rs.22 lakh. The low price is attractive for the Indians. It is difficult to find any car in the stable of Mercedes Benz with the same price tag. Mercedes Benz and BMW together control 70% of India’s luxury car segment. A market forecast predicts that by 2015, there will be demand for around 47000 luxury cars in India. The reason attributed is growing highways, increasing purchasing power of Indians and growing aspirations of Indians to own and drive luxury cars. Number of millionaires in India is also rising. In the year ended 31.03.11, Mercedes Benz delivered 6753 cars in India. In the same period, BMW delivered 7079 cars. BMW has ambitions to sell more than 10000 cars in India. Before BMW’s arrival in India in 2007, Mercedes Benz was controlling 60% of luxury car market in India. The market share declined to 34% in 2010 with BMW accounting for 36%. Volkswagen AG’s Audi came third with a market share of 17%.
BMW will not cede its position
BMW will not easily cede its number one market position to Mercedes Benz. It is introducing its larger X3 SUV in India this year as a locally assembled product. BMW is also expanding its Chennai plant next year. BMW aims to include India among its top ten markets by 2020. BMW is doubling the number of its dealer network from the current 27 to 60 by 2013. To counter this, Mercedes Benz plans to add 15 dealerships and service centres every year in India. Mercedes Benz has 36 showrooms and service centres in India at present. The strategy for both companies is to make sure that once a customer buys either a XI or a Mercedes Benz C-Class, he will upgrade to a luxury car in the not far distant future.
Opening of star lounge in Delhi airport
Mercedes Benz has opened a star lounge at the Delhi International Airport. It has displayed SLS AMG and offers free food to existing customers. Not to be outdone, BMW has a lounge in New Delhi with Olive Bar & Kitchen. It plans to open another lounge in Mumbai soon. The strategy is based on the notion ‘food, wines and fast cars go together’. The policy of Mercedes Benz is that the company is not merely selling a luxury car, but selling a lifestyle. In India, car sales are well divided into well marked segments. Audi, BMW, Mercedes Benz, Bentley and Rolls Royce take care of the top end luxury segment. Hyundai, Suzuki, Honda and Toyota take care of the bottom end segment meant for the masses. Now this fine division of segments may change from 2013. Daimler, the parent company of Mercedes Benz is planning to bring its compact cars to India. By 2012 middle, it will launch it’s A class and B Class cars in Europe. In 2-3 years, it plans to bring these cars to India in a CKD (completely knocked down) condition. Though pricing of these cars remains to be seen, it is sure to be affordable to many Indians. These cars will add substance to the company’ sales efforts along with the C-Class, S-Class and E-Class cars. In the SUVs, its range includes GL-Class, M-Class and R-Class.
Selling small cars in China
In China, Daimler is already selling small cars under the brand name Smart. It is able to sell large volumes of Smart in China. If Smart, A-Class and B-class cars are introduced in India in 2013, Mercedes Benz will be transposing itself from a luxury car seller to a full-range car producer. Not to be left alone, its competitor BMW is bringing its 1-series cars to India. It is possible to obtain Mercedes Benz luxury cars at half the price through leasing. Daimler has begun its financial services business in India and offers individual lease plans to suit everybody. Leasing is very popular in West but in India, it has not taken shape somehow. In USA, 40% of individual sales are through leasing. Service, maintenance and insurance of the car is also taken care of by the company, relieving the customer from these botheration. But at the end of the leasing period, the customer has to return the car to the company. One of the reasons why leasing has not grown a big way in India is because Indians are used to usage of their assets like cars for maximum number of years. There are Indians using their cars they bought fifteen years back. Therefore leasing does not suit them as they are forced to change their cars once in three years. The Western people are habituated to changing their cars once in two or three years and therefore leasing suits them well. But now this habit is catching on with Indians also who are affluent. Therefore leasing may become popular in times to come.
Saving customs duty
Mercedes Benz introduced two of its premium vehicles SL 350 and GL 500. The Sports car SL 350 costs Rs.98.50 lakh. The sports utility vehicle GL 500 costs Rs.81 lakh. Mercedes Benz has plans to assemble M-Class SUV in India to counter competition from BMW’s XI. This may begin in the company’s Chakan plant near Pune by the year end. BMW assembles its XI at its Chennai plant. It is planning to add X3 this year. Audi produces its Q5 in Aurangabad in CKD conditions. After the sedans, M-Class is witnessing high growth for Mercedes Benz. Local assembly will enable Mercedes Benz to avoid paying high customs duty of 60% on imports of completely built unit (CBU). On the other hand, importing a knocked-down unit of the vehicle will cost the company only 10% customs duty.
Targeting sale of 10000 cars a year
In March this year, Mercedes Benz bagged order for supply of 40 buses from Neeta Tours. The deal comprises of supply of 30 units of 2-axle and 10 units of 3-axle coaches. Mercedes Benz is also planning to raise localisation level in is production of cars. Within the next two years, Mercedes Benz plans to cross the coveted target of sale of 10000 cars a year. Recently Mercedes Benz launched its iconic G-55 in Mumbai. The G-Wagon off-roader was priced at Rs.11 crore and is the most powerful SUV vehicle in the stables of Mercedes Benz. It comes with a 5.5 litre V8 engine which delivers 507 H.P. of power and maximum toque of 700 Newton metres. It can touch the speed of 100 kmph from standstill in 5.5 seconds and can travel with a speed of upto 210 kmph.
Super rich love Maybach
There is a long gap between booking and actual delivery. Mercedes Benz takes upto four months for effecting delivery to the Indian customers. Other luxury cars also take similar time for delivery. Which car, the Indian super rich love to possess? Their choice may be Mercedes Benz’s Maybach 62, which can attain a speed of 250 kmph, priced at Rs.5.1 crore and Maybach 57S priced at Rs.4.85 crore. It can attain speed of 275 kmph. The delivery period after an order has been placed is nine months. Maybach car saloons can be fully customised according to the preferences of the customer. On request, the cars can be fitted with a partition and a 19 inch diagonal cinema screen on the partition. It has the facility of a camera to allow passengers on the rear reclining seats to view traffic. India is poised to enter global premium car market in about a decade’s time. Indian economy is growing fast. Already India is fourth largest economic power in the world. In Asia, it is second economic power. Going by purchasing power of people, India ranks second in the world. All these augur well for India to offer a platform for sales of luxury cars.
First overseas engine factory
Worldwide, the market for high end luxury cars like Maybach is around 1000 a year. In China, Mercedes Benz is able to sell around 25 units of its Maybach every year. Recently, Mercedes Benz laid foundation for its first overseas engine plant in Beijing. The new factory is expected to start its operation in 2013. In India, the competitors for super luxury cars of Mercedes Benz like Maybach are Rolls Royce, Bentley, Bugatti and Porsche. I have a deep ambition of owning a Mercedes Benz sometime in my life. But seeing the price, I know that it is well nigh an improbable task if not an impossible one. But I thank God that at least I am in a position to write about Mercedes Benz, if not owning it!
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