Mercedes-Benz bets on new products and strategy for India market

Once the undisputed leader in the luxury car market, Mercedes-Benz India (MBIL) is currently facing stiff competition from its aggressive rivals – BMW and Audi. With 7,138 units sold in 2012, the brand is No. 3 in the pecking order. Bernhard Kern, who recently took over as the chief of MBIL, points out that it also reflects the absence of Mercedes cars in some segments, unlike its peers. “I have a very different picture (of the rankings) because in the saloon and luxury SUVs, Mercedes is leading in India. We are not in some segments like smaller SUVs. There are some gaps but we will close the gap,” says Kern. The A-class and diesel version of the B-class are part of MBIL's play against its peers at the lower part of the premium and luxury car market.

Given the challenges and opportunities in India, 49-year-old Kern, a 30-year Mercedes veteran, has his task cut out. He plans to drive MBIL’s next phase of growth based on four pillars: new products, total cost of ownership, driving programmes and a robust network. These steps are being planned to strengthen connect with existing customers, and rope in new ones, especially first-time buyers.

“This segment is still quite small in India. An increasing number of young people are now rich enough to look for a Rs 25-30 lakh car,” says Kern, who brings with him the experience of Brazil where he spent five years with the company.

MBIL has kicked off its leasing business and hopes to capitalise it further. Kern says, “We’re the only automotive company at present that offers leasing. So with all the benefits you have out of leasing, the tax benefits you have and no outflow, you can invest your assets somewhere else and you just pay for the usage and so on.” Along with new strategies, new dealerships are being planned. MBIL has a network of 56 sales and service outlets. Six to eight more are being planned for 2013. As part of the preparations for the next wave of products, MBIL will also hike its installed production capacity to 20,000 annually by early 2014.

Mercedes-Benz, the oldest car brand, is also seen as a brand that’s losing the appeal among young customers. A new range, globally and in India, is being designed to up the oomph factor of the portfolio. As part of the larger strategy, several initiatives are planned. The recently launched Performance Drive is one such initiative. As part of this, MBIL will promote motorsport talent, drives at the racing circuit, and activities like the Rs 19-lakh, 47-day -long ‘World Tour’ that kicks off on September 16 and covers seven countries before arriving in India. For those who find the big ticket activities unaffordable, there’s an SUV test track drive, including a guided tour of the Mercedes-Benz plant in Pune for Rs 20,000.