Mercedes-Benz eyes smaller towns to ramp up sales

German luxury carmaker Mercedes Benz will begin assembling its latest SUV, the GL Class, at its Pune plant from August taking the total tally of locally manufactured cars to five with plans to add the latest models in the next few years. It is also eyeing smaller cities and towns to garner additional sales. 

"We have aggressive plans for the Indian market in 2013 which is also our year of offensive. We have the strategy to push our volume models in the Indian market and have seen some instant success with our compact luxury models like the A Class and B Class," Mercedes Benz India MD & CEO Eberhard Kern said. 

The carmaker has doubled the annual production to 20,000 units in Pune with a cumulative investment of Rs 850 crore to take on global rivals like BMW and Audi that dominate the Indian luxury car space. Entry-level luxury models such as the A Class and the B Class are currently imported from Germany and the company plans to assembly them locally with the possible availability of parts and components from next year. 

Mercedes Benz launched the next generation of its flagship E Class sedan on Tuesday to take on BMW 5Series and Audi A6 in the mid-size luxury sedan segment. The sedan is priced between Rs 41.51 lakh and Rs 44.48 lakh (ex-showroom Delhi). So far, Mercedes has sold over 23,000 E Class cars in India and this car will be assembled at the same Pune factory that also manufactures sedans like C Class and the S Class along with the ML Class SUV. 

"The E-Class has been the most successful vehicle for Mercedes-Benz globally with more than 11 million units sold. In India, too, the success story remains the same for the E-Class, which is the highest sold single model for the 'Three Pointed Star' in India. We have added more than 2000 fresh parts and components to the new model that makes it the most efficient E Class sold in the Indian market," Kern added. 

The E Class will be available in a 2-litre petrol and 2.2-litre diesel engine. The company is also offering a special launch edition of the new E Class, available at Rs 49.9 lakh.  Mercedes Benz is expecting India to become its top ten global market in the next few years.

The company is concentrating on smaller cities and towns to garner additional sales to tap the potential of the Indian market. It has started new dealerships at Dhanbad, Jalandhar, Karnal, Calicat, Tisawadi, Porvorim and Vadodra among other places to generate incremental sales from these new markets. 

"45% of our sales come from big metros like Delhi and Mumbai, which is not expected to change soon, but over the years the potential of new market would grow and help Mercedes to spread its wings in newer areas and generate fresh customers in the Indian market," Mr Kern added.

Mercedes Benz expects the Indian car market to reach 7 million units by 2010, up from 2.6 million in 2012. Of these the luxury car grabbed a miniscule 1.2% share in the domestic market that the company expects to reach 4% by 2020.