Daimler banks on small towns to up Merc sales

DaimlerChrysler India has recorded a higher growth rate for its Mercedes-Benz in smaller cities than in the metros.

Perhaps this is also the reason why it launched its next-generation Mercedes Benz E-class in Kochi before the car was launched in Delhi, which continues to remain its key market.

The company attributes its success in smaller cities to the changing profiles of its customers as well as changing buying habits. Daimler is also looking at starting dealership in cities like Bhubaneshwar, Calicut, Madurai, Jaipur, Kohalpur etc.

It said that although the west and the north have always been important markets, the east and some cities in the south are also experiencing strong growth.

The company also said of late they have seen more of individual buyers in the smaller cities, compared to the metros where large corporations are its customers.

The company also said people who bought Mercs were getting younger.

"Entrepreneurs, doctors lawyers and software professionals are the ones who buy the cars the most in smaller cities. Mercs seems to be extremely popular with doctors, and lawyers and entrepreneurs," a company spokesperson said.

"Earlier people used to wait till they were in their late 40s or early 50s. Now young, successful people who lead global lifestyles and earn global salaries wish to reflect the same through their cars and a Mercedes-Benz fits in perfectly. Now people in their early 40s are also buying the car," he added.

However, the C-class, which is the entry model for a Mercedes, is most popular in the small cities, whereas the high-end models like the E-class and S-class continue to sell mostly in the metros.

The company said last year, 40 per cent of its sales were made up by C-class, 40 per cent by E-class, while the other models such as S-class, M-class and the CLS and other imported models contributed the remaining 20 per cent.

In the metros, the sales of E-class have overtaken the sales of C-class. About 35-40 per cent of the C-class are sold in smaller cities.

The company saw a growth of 12 per cent in the calendar year 2005 from a sale of 1850 cars in 2004 to 2010 cars in 2005. It has sold 1765 models till the end of October this year.

To increase its penetration to smaller cities, the company said it was going to use the the hub and spoke model.

" The hub will be in the larger cities, where we will have our dealers who will serve the clients in the smaller cities through sales-service outlets which serve as the spokes," the spokesperson said.

DaimlerChrysler, which recently launched the new version of the E-class, said it was not planning to introduce new cars in the near future but would be looking at introducing new variants of the current models and retaining its present portfolio.