India: Mercedes could surpass Audi for premium leadership image

The third largest global luxury automaker, Mercedes-Benz, has a new strategy for the Indian market: raise deliveries of its compact car range to better reach the rapid growing part of the country’s luxury auto market.

The plan, according to analysts, could have the added benefit of transforming the German carmaker into India’s largest luxury brand – surpassing the current leader, Volkswagen AG’s Audi division. Mercedes recently introduced the facelifted B-Class minivan – an affordable, compact entry into the automaker’s luxury lineup and also said it wants to grow the sales of the segment by 50 percent this year. While the earning margins are not as high as the ones made by pricier cars, the compact models in the carmaker’s lineup accounted for a fifth of total sales last year, allowing Mercedes to reach record deliveries.

Additionally, the Delhi-based Emerging Markets Automotive Advisors forecaster says compact cars in India’s premium car market would jump from 25 percent of the total to 50 percent by 2022. Mercedes-Benz has been already closing the gap on Audi in India since last year – with total 2014 sales of 10,201 units, it was surpassed by the Ingolstadt-based rival by just 650 autos. “We are on full speed, we have our foot on the throttle,” commented Eberhard Kern, managing director of Mercedes-Benz India. Now Mercedes plans to launch 15 models in India in 2015 – the most ever – and also expand its sales network by another 15 dealerships. Local production capacity has also been doubled to 20,000 vehicles annually thanks to an investment program worth 10 billion rupees ($159 million).

Via Reuters