BMW, Mercedes shift gears

After two years of meagre profits and losses, the Indian units of German luxury car brands Mercedes-Benz and BMW have recorded a massive jump in profits...

By: and | Updated: March 21, 2016 12:41 PM

German luxury car brands Mercedes-Benz and BMW have recorded a massive jump in profits in 2013-14.

German luxury car brands Mercedes-Benz and BMW have recorded a massive jump in profits in 2013-14.

After two years of meagre profits and losses, the Indian units of German luxury car brands Mercedes-Benz and BMW have recorded a massive jump in profits in 2013-14, report Arnab Dutta & Rachit Vats in New Delhi & Mumbai.

The strong performance came not only on the back of robust volumes, but because the brands decided to maintain higher prices to protect margins, even though rival and market leader Audi waged war with steep discounts. Mercedes-Benz India posted a net profit of R191 crore in FY14, after a loss of R13 crore reported the previous year. In FY14, its total sales had risen 39% to R3,030 crore. Meanwhile, BMW India saw profits jump almost 11 times to R107 crore from R10 crore in FY13. Surprisingly for BMW, the profits rose even as total sales fell 12% to R2,024 crore.

merc-graph

Incidentally, aggressive pricing and a spate of lower-priced entry models like the Q3 compact SUV and the A4 sedan helped Audi emerge on top of the around 35,000-unit domestic luxury car market in calender year 2013 with sales of about 10,000 units – Audi, a Volkswagen Group brand, is most likely to retain the crown in 2014 as well. Audi had snatched the crown from BMW, which was the leader for four straight years — 2009 to 2012. Besides the top three German luxury car brands, others with significant volumes includes Tata Motors' Jaguar Land Rover, and Sweden's Volvo. “We have launched 10 new products for the Indian market this year and have witnessed an increased customer preference for our products. We are confident of ending the year on a double digit growth and continue our sustained profitable growth in India,”Mercedes-Benz India MD & CEO Eberhard Kern said.

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