German luxury car maker Mercedes Benz (MBIL) today said it is looking at bringing in cars priced below Rs 20 lakh to gain volumes and regain the top slot in the luxury car market in the country.
"I will not eliminate the case that we will have a car below Rs 20 lakh," said Peter Honegg, managing director and chief executive officer, MBIL. He indicated the A-Class scheduled for launch next year could be priced in this range. The company will also introduce a sports utility vehicle (SUV) based on the A-Class platform.
Honegg added, “In the next 5-10 years, 40% of our new models will be below priced Rs 25 lakh... The premium segment, which is in the range of Rs 20 lakh to Rs 30 lakh, is witnessing good growth in India, while the luxury segment above that is flat."
Luxury carmakers have started gaining a bulk of their sales from entry-level models in recent times. While BMW XI (Rs 22.4 lakh) contributed nearly a third to the sales of the company in 2011, Audi registered 950 bookings for its latest offering theQ3 (Rs 26.71 lakh) within three months of launch.
Mercedes, which had lost the top slot to compatriot BMW in 2009, is now facing stiff competition from rival Volkswagen Audi. The company has sold over 5000 units till September and is now looking at closing the year with sales at similar levels as last year (7430 units in 2011). It is likely to slip to the third position after Audi which is expecting sales of 8000 units.
"Globally our target is regain the number one position by 2020. In India, we will be fighting for number game much ahead of it. By 2015-16, we will have the entire range of products from premium to luxury in India and that is when we will look at competition again," Honegg said.
He said the company's present aim is to remain profitable in times of severe pressure from adverse currency fluctuations that has forced the firm to hike the prices twice by a total of 4-5% in 2012.
| Model | Price (ex-showroom, Delhi) |
| Mercedes B Class | Rs 21.49-24.87 lakh |
| BMW XI | Rs 22.40-30.40 lakh |
| Audi Q3 | Rs 26,71-32.10 lakh |
| Toyota Fortuner | Rs 21.15-22.32 lakh |
| Ford Endeavour | Rs 17.90-20.85 lakh |
| Skoda Superb | Rs 18-24.74 lakh |
| Volkswagon Passat | Rs 22-27.26 lakh |
| Hyundai Santa Fe | Rs 22.34-25.37 lakh |
To gain volume and remain cost competitive, Mercedes-Benz will assemble all its future volume-driven models in India. "Initially, we may sell some cars as imported models, but after a certain period, all models, which are volume drivers, will be assembled here. Even the B-Class, which has recently been launched, will be assembled," Honegg said.
The company is investing Rs 250 crore to expand production capacity. The plant has a capacity to produce 10,000 cars every year on two shifts basis and the company has the capability to increase it to 100,000 units in the next 10 years.
The company today introduced sport editions of its C and E Class premium sedans. While the new edition of the C-Class is priced at Rs 29.9 lakh, that of the E-Class is offered at Rs 39.9 lakh (ex-showroom, Delhi).