Mercedes plans to launch new sub-Rs. 25 lacs car in India

Friday 15 June 2012, 00:44 AM by

As per The Brand Trust Report, Mercedes-Benz is among the top 100 most trusted brands in India. In the year 2011, the car manufacturer was honoured with the Best Brand Award. However, the German car maker, which arrived in the country in 1994, has been in a fix since its rivals BMW and Audi made an entry into India. In 2009, Mercedes lost its top position to BMW and in the first quarter of 2012, Audi overstepped Mercedes' sales to grab the second position.

The company has not been able to generate satisfactory sales volume despite having the biggest dealership network in its respective segment, with 61 outlets across 37 cities of India. According to Managing Director (MD) and Chief Executive Officer (CEO), Peter T. Honegg, the company is in a process to shift its image. It is on track to become a brand that inspires one’s lifestyle in terms of sportiness and provides an adrenaline rush to the youth. Earlier, Mercedes was considered to be an old man's car and only catered to 50+ high profile corporate executives.

Mercedes-Benz initiated the Star Driving experience with Farhan Akhtar in order to lure the Indian customers via star power and is also organising test drives of the performance-oriented AMG models at Buddha International F1 Circuit to retain its position. It is yet to bring a product in the entry level luxury cars segment, which includes all luxury cars priced below Rs. 25 lacs. The arch-rival BMW has revolutionised the segment with its Sports Utility Vehicle X1 and has been perched on the top due to excellent sales.

Honegg feels that the sub-Rs. 25 lacs segment has become huge since the X1 arrived and now offers ample opportunities. Mercedes is planning to introduce a product in this category in an attempt to capture the peak position by 2020. To mark its presence in this particular segment, the German brand is planning to bring the B-Class and A-Class in the country. Honegg said that Mercedes will only launch the cars which will appeal to the buyers and help it raise sales in India.

According to the brand's MD, the luxury SUV segment in India has great potential, with a growth pace of nearly 50%. On the other hand, the luxury sedan segment marks a growth rate of 25-30%. In this segment, Mercedes has the G-Class and M-Class on offer, with the latter being a huge success since its launch. The company has been seen steady growth in its sales with every passing year since its launch. In the first year, 100 units were sold, followed by 200 units in the second year, and 300 models in 2010. In the year 2011, Mercedes M-Class sold 500 units in the country and now contributes up to 10% to the company's sales.

When questioned about the brand's 'Old Man's Car' image, Honegg said, “ Mercedes has been doing market studies and we have seen that Mercedes is well received in the age group above 50 years. In the age group of 40-50 years we are at par with the competitors and we are well received even in the lower age groups. Our C 63 AMG model is quite a hit amongst the lower age group consumers.”

Speaking on company's expansion plans, he said, “We have the strongest dealership network in terms of sales and after sales. We have recently opened showrooms in Karnal and Nashik. We will soon be opening showroom in Bhubaneswar (Orissa). We currently have 71 touch points across 31 cities.”

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