Mercedes-Benz is seeking more exposure in smaller Indian towns to draw bigger profits and to reach the top of global luxury brands.
Estimates are showing India has the world’s fastest-growing population of high net-worth individuals last year. And this means the population has higher financial capabilities than most people think, with many of them also intending to buy premium cars and not seeking just cheap vehicles. The trend is not only for big cities’ customers, but also for the smaller urban areas. “Carmakers have realized that small towns in India have a lot of people with a lot of money and the information about luxury brands is percolating faster with the Internet,” said Deepesh Rathore, a director at Emerging Markets Automotive Advisors in London. From Mercedes, “the GLA, the A-Class and B-Class are practical for the narrower roads of small towns as well as affordable.” Therefore, Mercedes-Benz has opened ten new dealerships in locations other than in big cities so far, planning for five more outlets until the end of December, as is seeking to win more buyers by getting closer to them, according to Roland Folger, Mercedes’s chief executive officer in India.
“There’s people, there’s purchasing power, there’s very high aspirational attractiveness of our brand, but there’s nobody there offering vehicles to buyers,” said Folger. “People don’t like the idea of having to travel four, five hours to buy a car and then have a service issue. So our approach is to be closer to the customer.” Other premium carmakers have been focusing on expanding outside India’s largest cities as the economic growth and easier access to the Internet is driving aspirations. Mercedes’s rival Audi AG said last week it opened a new dealership in Rajkot, among 53 cities in the country with a population of more than 1 million people.