Mercedes-Benz Moves Off The Beaten Track

Mercedes-Benz India Ltd has extended its famous brandname and logo to high-fashion garments and car accessories to be sold in boutiques along with its existing retail network. The car major is also contemplating entering the auto finance and car insurance sectors. The worldwide consultancy wing of DaimlerChrysler, Tepis, has already started studying the Indian car finance and automobile insurance market and a decision will be taken by the end of this year. According to the managing director and chief executive officer of Mercedes-Benz India, Jargon Ziegler, 70 per cent of the automobile business comes from after-sales servicing, car financing, insurance and retail activities. Therefore, the current extension of the brand to related products like car lights, flash lights and key rings and the company's interest in car financing and insurance is a logical forward integration for Mercedes-Benz. "Worldwide, 30 per cent of sales of automobile companies come from first-hand sales of cars and the rest from this sort of related activities. So, if we want to expand our business in India, we will have to look into these areas also," Ziegler told Business Standard. The retail outlets, which will be called Mercedes Boutique, will be a part of the company's 11-member strong dealer network. Garments and other items, too, will have the well-known logo on it. Ziegler said the agreement with the company's dealers cover retail activities too. "It is a part of the total deal," he added. Mercedes-Benz India, which is a 86:14 joint venture between Germany's DaimlerChrysler and Telco, already has arrangements with Standard Chartered Bank and Kotak Mahindra for financing its products. Ziegler reaffirmed the company's proposed entrance into the auto finance and insurance market by saying "It is a possibility". He, however, said the company was not yet ready to file its proposal with the Insurance Regulatory and Development Authority. He was in the city to inaugurate the city's first exclusive authorised showroom of Mercedes-Benz. The company is planning to introduce the S class range of cars in India some time next month. According to Ziegler, the product will be priced at around Rs 65 lakh and it is the ultimate mark of quality in the company's product basket. During 1999-2000, the company's turnover was Rs 160 crore and for the current year, the target is Rs 250 crore, which includes sales of almost 1,000 cars. Mercedes-Benz has also started refurbishing old Mercedes models. Ziegler said the company was accepting cars up to 67 years old. "The demand is also 600 cars per year, but we can refurbish only 100. So, there is a backlog," he said.