Mercedes-Benz chalks out 4-pronged strategy for India

Mercedes-Benz India has evolved a four-pronged strategy towards passenger cars this year as it transfers its truck and bus business under Daimler India Commercial Vehicles (DICV). The company had been selling buses inter and intra city and Actros mining trucks in the India market, which would now fall under DICV portfolio.

As part of its India approach, Mercedes-Benz plans to launch four new products this year, invest in dealer network, improve overall ownership cost and double production at the Chakan plant.

"We have termed this year as an offensive year for Merc in India with aggressive plans to strengthen our position in the market," said Eberhard Kern, MD and chief executive, Mercedes-Benz India. "Going forward, Chakan will be for passenger cars and Chennai will be for trucks and buses," said Kern.

Starting with the launch of G63 on Tuesday, Merc plans to drive in its much-awaited premium hatchback A-class in diesel and petrol variants by mid-2013. Other launches are the new GL in May and the B-class diesel variant around the same time.

Mercedes-Benz is doubling its production capacity from 10,000 units to 20,000 at Chakan by end of this year to make space for the new models. Moreover, the company is looking at localisation in a big way to improve ownership cost to the customers.

Mercedes-Benz assembles models like S-class, E-class, C-class and M-class at its plant with localisation ranging from 10% to 60% over various mentioned models. Asked about plans of further localisation and possibility of an engine facility at Chakan, Kern said, "I cannot talk of plans on other models but yes, we would look at further localisation on our models by end of this year." He did not divulge any plans of an engine facility but said the relationship with Force Motors to assemble its engine for them would continue.

Mercedes-Benz sold 5,006 units during April to January 2012-13, down 14.37% year-on-year. It is hopeful of doing better this year, though a "relaxation in taxes on luxury cars in the forthcoming Budget" would be key to it.

Mercedes-Benz has invested about R850 crore in India. "This amount does not include investment made in dealership networks," said Kern while declining to put a number to the future investments in India.

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