Financing of Mercs is set to become hassle-free. Daimler AG, parent company of Mercedes Benz India, is soon going to set up its financial services arm in India, which would initially start with dealer financing and private financing of vehicles.
The company will eventually start both corporate and individual leasing of Merc cars. Leasing is still to catch up in the Indian market. In vehicle lease, an individual buys a car on a 3-4 year lease and a price determined by the auto company for the given time period.
Mercedes Benz India managing director Peter Honegg said, ?The company is doing well both in the SUV, and sedan segment, and the company would continue this approach through 2011, and looks forward to other performance benchmarks. At this juncture, it would work best for us if we launch financial services in India. In Europe and the US, around 60% of the Merc cars are financed by Daimler Financial Services.?
Though, Honegg refused to give details of the timeline of the DFS launch, it is understood that the company will make a formal announcement in a couple of weeks. All neccesary approvals from Indian authorities including the Reserve Bank of India (RBI) are in place apart from a formal nod from Daimler board.
Starting in the second half of 2011, DFS will offer financing, insurance, and fleet management for Mercedes-Benz passenger vehicles in India. Financial services for commercial vehicles will follow in 2012.
It is understood that once the DFS facility is on course, a Merc buyer will have a lot more flexibility in terms of financing of cars compared to other banks.
DFS is a leading captive financial services provider for passenger cars and one of the largest CV financers in the world supporting Daimler vehicle sales in more than 40 countries. DFS India would be an independent subsidiary under the Daimler board.
Mercedes Benz India recorded sales figures of 561 units for May 2011, which marks a 36% increase over sales figures for May 2010 when it sold 411 units in the Indian auto market.
This has allowed the company to record 60% growth by selling 3,233 cars for the January- May 2011 period.
