Mercedes-Benz to focus on premium portfolio to attract buyers

Mercedes-Benz Thursday said nearly 40 percent of its portfolio would consist of premium cars priced Rs.20-25 lakh to meet the growing demand in the luxury segment and regain market share lost to rivals.

“Going forward in the next five-six years, we expect to have nearly 40 percent of our portfolio to come from the premium segment which are 25-lakh or below cars. This segment is growing very rapidly and we were not present in that segment,” Peter Honegg, managing director and chief executive, Mercedes-Benz India, said.

According to the Honegg, this strategy will help the company in gaining lost ground to its competitors like Audi and BMW. Both the rivals have offerings in the premium segment like the Audi Q3 and the X1 which are very aggressively priced.

Recently the company launched the B-Class compact sports tourer at a starting price of Rs.21.49 lakh (ex-showroom Mumbai), its cheapest offering in India.

The company is likely to launch its supermini A-Class by next year with an expected price to be below Rs.20 lakh.

“We expect the A class to be bring us numbers. It will be launched sometime next year. With B-Class as its a new segment all together we do not expect a whole lot of (sales) numbers, but the response has been good. We have already sold the 250 units for Oct-December and we are taking new orders for the January deliveries,” Honegg said.

Mercedes has, however, fallen behind rivals BMW and Audi in terms of sales, as the other two companies have introduced aggressively priced products. Sales of Mercedes-Benz’s cars fell to 1,257 cars behind Audi’s 1,908 sold during April to June 2012. BMW stayed in the lead with 2,088 units sold.

Apart from A-class, the German company is also looking at possibility of introducing the GLK and GLC range of compact luxury sports utility vehicle (SUV).

Honegg added that the current market situation and the volatile rupee have impacted the luxury car market and that he expects the sales to be flat this year.

The company further said it is investing another Rs.250 crore apart from an earlier tranche of Rs.600 crore it has already spent on its Chakan facility near Pune for local production of a range of products, including SUV M-Class.

“The investment will help strengthen production and operational capabilities of existing products. Somewhere down the line we will also look at local assembly of the A-Class,” Honegg added.

Honegg was speaking at the sidelines of the launch of the company’s new sport edition models of the C-class priced at Rs.29.9 lakh and E-Class priced at Rs.39.9 lakh.

Till now 16,000 units of C-Class sedans have been sold in India, while 21,000 units have been sold.