Mercedes-Benz India is gearing up to face the heat in the Indian luxury car market as it loses ground to rivals. Therefore, it has brought out the 3rd generation M Class luxury Sports Utility Vehicle (SUV) to defend its turf in India. The model's price is 15 per cent lesser than that of the previous model, which had a price tag of Rs. 66 lacs.
Since its launch in 2008, the M Class has been the most popular offering from the company in the SUV segment, with sales of more than 1,500 units in India. Another noteworthy point is that 10 per cent of the total sales of car maker in India are from SUVs only. As the company will start localised production, thereby lowering the price of the car, it expects the sales to scale new heights.
According to Murad Ali Baig, auto expert, “While a sedan like a Mercedes E class or C class is prestigious but they don’t have the masculine image which a lot or young rich people identify with. So for that consumer segment a luxury SUV is more macho and is something that represents its own lifestyle.”
The luxury car market is also characterised by the popularity of entry level cars starting at merely Rs. 22 lacs. Launched 18 months ago, BMW X1, which brought down the price of a luxury car to Rs. 22 lacs, has been received well by the market. To mark its presence in this segment, Audi launched Q3 in January 2012, while Mercedes-Benz is yet to enter this domain but is eager to do so in new future.
Managing Director (MD) and Chief Executive Officer (CEO), Mercedes-Benz India, Peter Honegg commented, “We realise the game has changed in the past one year with luxury cars being available starting from Rs 22 lacs and it’s a big segment and there is a huge opportunity. We will soon operate in that space. And we will again change the game in this space.” He further confirmed that in order to compete in the entry level luxury car space, the company is planning to launch its A and B class vehicles in the country soon.
Its 15 year old history in the country could not prevent Mercedes-Benz from losing market share to late comers like Audi and BMW. The latter overstepped it in 2009 to become the top selling luxury car brand in the country. Considering the Q1 2012 sales figures of Mercedes-Benz (2130 units), Audi (2269 units) and BMW (2369 units), it is obvious that Audi has snatched the second position from it as well.
Honegg remains unconcerned by these developments, as he said, “A few years back we were No 1 player and were selling about 3,000 units, last year we were number two and sold over 7,000 units. I am glad to be No. 2 and selling 7,000 units. On a serious note, we would rather focus on profitability than on just increasing the total sales volumes and I can assure you that we are much more profitable.”
In 2011, Mercedes India was the second biggest luxury car maker as it sold 7,430 cars to mark a growth of 30 per cent. BMW took pole position by rolling out 9,400 units, while Audi was at the third place with sales figures of 5,511 vehicles. The future too seems bleak for Mercedes, with brands like Jaguar adopting an aggressive stance in India, where 23,000 premium cars were sold in 2011 only.
