Mercedes-Benz to launch five new models in India

Mercedes-Benz is betting big on its foray into the luxury compact car segment with as many as five models due for rollout in the Indian market. The company is all set to launch a diesel version of its B-Class, the new A-Class as well as the GL-Class over the next one month with the compact SUV GLA and 4-door coupe CLA due for debut later. The compact focus is part of the German company's global strategy to grow its geographical footprint and target younger customers in markets both traditional and new and Mercedes-Benz is backing it up with a new engineering strategy to make affordable products in what could be a big volume segment. 

"Mercedes-Benz has a clear plan of attack," said Jorg Prigl, VP-product group compact cars, Mercedes-Benz Cars Development. "We expect new growth to come from the compact segment since it will open up new markets like China and the US and fetch volumes in markets like India and Brazil which will be completely new for that segment. India and Brazil have potential provided we make products specific to these markets and manufacture locally." 

For now though the range will start off being completely imported to capture the first-mover advantage. "The A-Class will be the first luxury hatchback in the Indian market," said Eberhard Kern, MD and CEO, Mercedes Benz India. "We are targeting younger customers with the A-Class, B-Class, CLA and GLA. Currently Mercedes Benz has a pool of 40,000 customers in India and their family might think of this range as an option. We will decide later on which cars to produce locally," he added. 

There's a reason why Mercedes Benz is going all out in search of volumes despite the current slowdown dogging the Indian market. Like SUVs, luxury cars too have managed to buck the sentiment downturn and the segment comprises less than 2% of the Indian car market. "By 2020, we expect the luxury segment share to go up to 4% of a 7 million unit car market or around 280,000 units a year," said Kern.

"Which means we expect the luxury car market to grow to roughly ten times its current size. India is one of the major strategic markets for Mercedes Benz." Given that the Indian business is now profitable - a huge improvement from the time when it had become a BIFR case - the company is now trying to change its business mix to nip ahead of arch rivals Audi and BMW. "We are planning that when all the cars are available, the new generation will comprise 40% of our business in India - the biggest chunk alongside sedans and SUVs which now command 80% and 20% of our sales respectively," said Kern. 

Mercedes was hit by the absence of a compact SUV to take on the BMW X1 which totted up big volumes for its German rival. That explains the need for speed - "by 2015 we will have the entire compact range in India," said Kern. But more than speed and positioning, Mercedes Benz has also reconfigured its engineering instincts with the compact range. It has moved away from the current trend of using variable platform engineering that tweaks the wheelbase to spawn multiple car architecture out of engineering one. 

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