Luxury cars are not merely for the rich and famous any more. In an attempt to draw in newer buyers into its brand, Mercedes Benz broke another price barrier on Tuesday driving in its B180 Sports Tourer tagged upwards of Rs 21.49 lakh (ex-showroom, Mumbai). The car is the cheapest offering Benz has in its portfolio and priced significantly lower than the entry-level C Class sedan which starts off at Rs 31 lakh. And the results are already visible. In pre-launch bookings, the company has sold out all of the 250 units it had allotted for India till December this year. New deliveries would now be made only in 2013.
Debashis Mitra, director, sales & marketing, Mercedes Benz India Limited (MBIL) says, “We are targeting a completely new set of customers with the vehicle. We will be creating a new segment with B180 which offers the comfort of sedan with the versatility of a sports utility vehicle.”
The B Class owner is not your average luxury car buyer. For one, their age profile is lower at 28-30 years from the average 35-40 years for a luxury car buyer. The income profile for the target consumer group stands at a salary bracket of Rs 25-30 lakh per annum.“While over the week they flit around closing business deals, in the weekend they live on adventure and thrills. They own an ipad, are active on social media for which reason the entire promotional campaign around the B Class too has been done on the net”, adds Mitra. The B-Class is India's first sports tourer. Globally the sports tourer category comprises cars like the Audi A3 Sportsback, BMW Active Tourer 1 series and VW Tiguan and Touran and Ford C Max. Mercedes Benz has sold 75,000 units of B Class Sports Tourer worldwide.
Though the Indian luxury car market which witnesses scorching growth rates of 70-80 per cent in 2010, increased by a modest 10 per cent to 9926 units in the first five months of the fiscal, long-term prospects remain firm for the category. Industry estimates suggest over 300,000 vehicles priced above Rs 20 lakh is expected to be sold in the country by the end of the decade, Nearly 40-50 per cent of the volumes would come from entry-level luxury models tagged between Rs 20-25 lakh.
Little wonder then that luxury car makers from Mercedes Benz to BMW and Audi have been going down the price ladder to scale up numbers. While Mercedes Benz has lined up for launch a compact A Class car and a premium sports utility vehicle GLC to take on BMW X1 and Audi Q3, compatriot BMW is set to bring in 1-series (tagged around Rs 20 lakh) early next year. Audi has initiated feasibility study for compact sedan A3 in India.
“The idea is not to cut price but to introduce new products, create new categories, generate excitement and bring in numbers. We want to grow our sales over three-fold to 25,000 units by 2016 and to 90,000 unit by the end of the decades. The B Class is the first of the next generation compact cars (NGCC) we have scheduled for launch in India to regain leadership position”, informs Mitra. Already, luxury carmakers have started gaining a bulk of their sales from entry-level models. The BMW XI (Rs 24.5 lakh) contributed nearly a third to the sales of the company in 2011, while Audi registered 950 bookings for its latest offering theQ3 (Rs 26.71 lakh) within three months of launch.
Mercedes, which did not have a sub-Rs 25 lakh offering previously, slipped to the number three slot in the luxury car market in India earlier this year. The company has been facing stiff competition from Volkswagen Audi. S ales at MBIL declined by 23 per cent to 2135 units till August this fiscal.