Steadily losing its market share in the luxury category to other OEMs such as BMW and Audi, German luxury biggie Mercedes-Benz India is not perturbed. It is working on a new marketing model to re-energise its brands across categories to maintain a dominant hold over the premium luxury market which has steadily grown at 13-14% over the last one year. In line with the company?s overall planning it launched the SL 350 and the GL 500 in the price range of R80.9 lakh and R98.5 lakh respectively on Tuesday. In an interview with FE?s Rajat Guha and Ronojoy Banerjee managing director of the company’s India operations Peter Honegg discussed the company’s strategy going forward.

The government recently changed the definition of completely knocked down (CKD) units as per which pre-assembled engine parts would attarct a duty of 30% as opposed to 10% levied earlier? One of the car makers have already said that they would have to review their India plans, how do you view this?

We are not going to review our India plans. We have already fulfilled requirements across two of our lines. There could be an increase in some model prices, especially for the C- and E-Class Mercedes-Benz cars. We are committed to India’s growth story.

When will Mercedes-Benz bring in its cars like A-Class and B-Class to India?

There is a market for the A- and B-Class and I think it would be another two years before we can bring in the car. If we have to bring it in India and sell volumes then we have to look at ways to produce it here that would be around 2013-14. We are in talks with our headquarters to bring in these cars into India.

How are you looking to change your marketing plans in India to make your brand more powerful?

One of the areas that we can look at is to increase our focus from a branding perspective in Formula 1. We must talk a little bit more about the event and offer more AMG cars in India. So far, it was a risk for our dealer to bring it in. We may have to look at fashion and lifestyle which we do in other countries. We are already doing that in other countries and it is in line with our company?s core values that is luxury.

Competition from BMW has been growing. They are the largest selling luxury car maker in the country. How do you look at it, especially when you had the first mover?s advantage?

We are at present not looking at garnering numbers and become number one in the luxury car segment in a hurried manner. What we really want now is to use our significant network in the cities in the most efficient way. Yes, competition matters to us. We have lost out on market share in the last few years. We could easily address this through continuous introduction of new models from our German stables. Furthermore, as I said Formula 1 will help us in that regard. We have the engines in the Force India, we have the engines in Mclaren.

Overall, how do you see the Indian market fitting into the company?s global plans?

Our target in India is not to be number one but be the market leaders in whichever segment we are present in. Our core elements are strong and currently have local sourcing up to 40%.

In the next five to 10 years, India is going to be among the largest markets in Asia and in the next two decades it would be among the top three markets in the world. By 2021, we feel that we could see up to 50,000 to 60,000 unit sales in India. We are already selling 1.5 lakh units in China annually.