Daimler seeks govt support

DaimlerChrysler India, which doubled the sales of its Mercedes-Benz luxury cars in India in calendar 2006, is seeking government support to further develop the luxury car market in India.

The company, which is soon going to set up a second manufacturing unit in Pune, has asked the Centre to end in the forthcoming budget the disparity between excise duties for small and large cars.

"The potential that India has in the luxury car segment is substantial and we would want to see continued government support in developing the market. We really want to see the end of discrimination as far as excise duty is concerned," Wilfried Aulbur, CEO and MD of DaimlerChrysler India told Business Standard.

At present, the excise duty on small cars (for anything less than 1,200 cc in case of petrol version and 1,500 cc for diesel version, with a length not exceeding four metres) is 16 per cent, as against 24 per cent in case of luxury/large cars. The luxury car's engine capacity generally starts from 2,000 cc and length is more than four metres.

The luxury car market in India at present is just about 0.4 per cent of the overall car market of about 1.2 million units per annum. This figure is much less as compared to China where the luxury car market is 7.5 per cent of the overall car market which stands 4 million unit for annum, according to DaimlerChrysler sources.

In 2006, DaimlerChrysler sold 2,121 units of Mercedes Benz cars in India , the highest for the company in India during the last one decade. This was also a growth of about 11 per cent in sales, as against 5.5 per cent in the 2005 calendar.

Aulbur said despite this, India was still a very small market for the company. "Globally we sell about 1.1 million vehicles per annum. India with 2,121 units is still very small, if compared with China where we sell about 21,000 units per annum. So, we feel there is a lot of scope for growth," he added.

According to the company, of the 2,121 units sold in India in 2006, 248 were S-class, 922 were E-class and 883 units were C-class. Besides, the company had sold 30 CLS-class, 35 SLK-class and three SL class cars.

In region wise, while the North and West contributed about 35 per cent each to the total sales, South contributed about 30 percent and the East contributed a very small percentage.

"So, we are expecting much more sale both from the South and the East," he added.

Besides, in 2006, about one third of the company's total sale came from tier-II cities including Kochi , Madurai, Coimbatore , Bhubaneswar and Lucknow.