Response from tier-I & II cities is very encouraging

Written by Ronojoy Banerjee | Ronojoy Banerjee | Updated: Jul 8 2010, 05:56am hrs
Premium luxury car maker Mercedes-Benz India is betting big on emerging markets, especially India and China. In an interview with FEs Ronojoy Banerjee, managing director and chief executive, Wilfried Aulbur, said India is ready for the A-class Mercedes and the company would eventually launch it. He also talked about the companys India strategy and the growing competition from other car makers. Excerpts:

Recently, Mercedes-Benz has entered the used car market in India. What prompted you to take this step

In order to offer our customers a good experience, we have decided to come out with our global used car programme which was launched in 2009. It is currently in operation in 35 countries. And the opportunity here is to say that customers get a very clear and transparent evaluation of cars that have been rectified. We also help customers by arranging finance for the car. It allows us to serve our customers better to help them exchange their cars and open up the segment for new customers.

Since over 70% of Mercedes-Benz cars are sold in the metropolitan cities, is there any move perhaps to penetrate newer markets

That is changing. A lot of activities are taking place in smaller cities. We are very encouraged by the response our products have got in the tier-I and tier-II cities. It gives us an opportunity to expand the network.

How important is the company's R&D centers in India for Mercedes-Benz globally

It is an integral part of our global R&D. It supports our bus and truck operations in Japan, truck, bus and passenger cars in Germany and truck operations in the US. In that sense, it is fully integrated. It is the largest R&D facility outside Germany. While we are currently doing part development, our next step will be to work towards motor and variant development. So there is a clear plan in place. We currently have around 550 engineers working in Pune and Bangalore and I expect that number to grow. In 2006, the total headcount was around 200. This gives an idea of how we are growing.

Your company is looking to source more components from India. What advantages do you get from this

This is part of our efforts to do sourcing wherever we find the best quality, delivery capability and price. And as far as that goes, we have clearly identified two countries in Asia as our focus points. One is China, since more than 100,000 Mercedes-Benz are sold in that country. The second is India. We are now putting engineering and quality logistics here.

There have been several reports of Mercedes-Benz looking to introduce its small car A-class into India. Can you throw some light on that

At some point the Indian market will be ready for it. I see that happening. But we have not taken any decision on that yet.

How is the company looking to deal with competition from other newer entrants in the premium luxury car segment

We have to look at it like it from the perspective of what kind of products other companies are introducing in the country from example we don't have a small SUV. We have one globally but not a right hand drive. Also we believe in the value for money, profitable growth and we do not believe in bringing the prices down. We dont think it is a reasonable business model.