The luxury car maker Daimler said on Sunday that it has no plans to develop a cheaper model for emerging markets like India under its Mercedes Benz brand. The decision has been taken despite company’s arch rival BMW gaining ground in the country through its recently launched lower priced vehicles such as the BMW X1. According to a statement given by Daimler chairman Dieter Zetsche, the company will lose brand value introducing cheaper cars.
In a statement given to TOI, Zetsche said, "We lose strength by moving away to a different brand." He added, "We are a premium car manufacturer, and very successful in the segment. There is no benefit in expanding to the volume segment."
It is to be mentioned here that BMW India had snatched the position of top selling luxury car maker in the Indian market in year 2009. Now, a major concern for the Daimler Group is BMW’s recently rolled-out compact SUV X1 that is expected to drive high volumes in the Indian market.
However, Daimler seems not quite interested in the volume game as long as it is earning high revenues. "Competition is good. In any case, unit volume is not the top priority for us. Our aim is to grow in revenues," Zetsche said
However, at the same time, Mercedes has been working on a small car for India in collaboration with Renault and Nissan. Clearly, the company is indeed aware of the high potential market of small cars in the subcontinent.
In a recent report in the Hindustan Times, Zetsche commented on the possibility to come up with global small cars for which Renault and Nissan are its partners.
Mr. Dieter Zetsche says,“ We have worked very closely with Renault over the past year and if we are able to develop something suitable for the market, then India could get it”, adding, “We know small cars is big in India and we are aware of the growth potential. There is lot of work going on between Renault and Smart. The new A-class also has a high chance.”
