Buoyed by the impressive response to its recently launched compact luxury models such as ‘A’ and ‘B’ Class, luxury carmaker Mercedes-Benz India has said it will introduce more models in the segment, including a sedan and a SUV, next year. It expects nearly 40% of its total sales to come from these new-generation compact luxury cars by 2016, said Eberhard H Kern, managing director and CEO, Mercedes-Benz India.
The company will, in all probability, start assembling its ‘A’ and ‘B’ class locally early next year to bring down the waiting period from 2-3 months.
“Anticipating a demand pick-up, we have planned a number of launches in the compact luxury car segment next year. We have made an additional investment of R250 crore to double capacity to 20,000 units per annum. We have not taken a decision yet on assembling our popular luxury compact models yet. However, we don’t rule out assembling them locally beginning next year (2014) to avoid long waiting periods,” said Eberhard Kern. The company has so far invested around R850 crore at its plant in Chakan near Pune, he added.
Speaking to FE, he said: “We have regained our growth momentum through recently launched six new products across different classes in the last one year or so. The new compact luxury segment cars such as ‘A’ and ‘B’ have especially given us a clear edge to take on rivals such as Audi and BMW, with 22% growth in the January-July period (4,575 units) this year.”
“We are looking at introducing more new-generation cars in the compact luxury segment as part of our mid-term target. We expect 40% of our total sales to come from the compact luxury segment by 2016.” Currently, one out of four cars sold are either A or B class, he added.
On the company's own financing arm, he said: “Our captive financing arm contributes nearly 30% to our overall sales, which would further go up sharply as and when we increase the number of dealerships. We are targeting 17 more dealers in the next one year, out of which five will be added during the year. Currently, the company has 57 dealers across the country.”
On leasing, Eberhard Kern said: “The leasing business is slowing catching up.We are wooing big corporates, including multinationals, with cost-effective packages to boost sales through the leasing business. Currently, 3% of our sales come from the leasing route and, with the new- generation compact cars coming into place, we hope leasing will do good business.”