Mercedes-Benz bullish on Indian market

MercedesGerman carmaker, Mercedes-Benz which was one of the first premium carmaker set up branch in India, is bullish on the Indian market, according to Benz India Managing Director & CEO Wilfried Aulbur.

The company sold 2,401 cars between January and June 2010 with a rise of 79 per cent from the same six-month period in 2009. The company was the early entrant into the market is only recently being challenged by rivals like BMW and Audi.

Mr. Aulbur says that Indian market has great future and the company with its investment and engagement with customers along exciting products is capable of profiting from India’s growth.

The company expects the luxury car segment to have double-digit growth and sees significant sale potential in the coming years. He disclosed that its partners have invested Rs 200 crore across the country and the franchise looks very attractive.

In terms of price Mr. Aulbur said that the CBU (completely built units) import duties are very high and add about 115 per cent to the cost. If these duties are reduces it will help push up volumes and increase more production into the country.  

The company has some local vendors for assembling engine, the power train, the gear box, the axles, the underbody of the vehicle and the cockpit and who are contributing to the value addition. He added that some a local vendor has become its global supplier.

The comoany is aiming for young people either as entrepreneurs or as high-level executives in multinationals and large Indian companies. Asked if Indian market has grown as much so that a car can be designed just for the Indian market, he said that the volumes are still low and the reduction in import duty will help in pushing up volumes.

In terms of trucks, Mercedes-Benz has sold more than 800 trucks that re perceived to be expensive in the Indian market. The comoany made the cash flow positive in the second year and broke even in the third year.

The comoany faced difficulties in the bus segment; it was able to sell only nine buses in 2009 because its target market with private operators did not have the purchasing power during the year.