Until the late nineties, Mercedes was considered as the epitome of luxury and a car that every crorepati was supposed to have. It was the time when words "Oh dekho, Mercedes gai" were uttered when the car with the familiar logo drove by. From politicians to actors, anyone living an uber rich lifestyle was supposed to have a Merc in their garage.
Fast forward to 2012, things are changing. Changing times and trends have revealed a setback to the ‘Mercedes’ brand within the luxury car market in India. Mercedes-Benz lost the top spot a few years back when BMW, yet another German car maker edged it out in terms of volume.
And if the latest numbers are anything to go by, Mercedes-Benz has been edged out of the 2nd spot by rival German car maker Audi. In the first quarter of 2012, Audi sold 2,269 units while Mercedes-Benz sold 2,130 units.
So why did a brand that has been present in India for more than 15 years, receive a blow from competitors who have been in the market for less than 5 years? "The customer sees them as more contemporary brands, with more products. BMW and Audi have created multiple sub-segments within the luxury car market and this has worked to their advantage" says Abdul Majeed tracking the auto segment at PWC India.
The biggies from both automobile manufacturers went head to head when Debasis Mitra, Sales & Marketing Director at Mercedes-Benz India said "Our customers do not compromise, and ‘strip down’ models are not for them" reported TOI. He was obviously referring to the cheaper variants that Audi have on offer to match the needs and requirement of various clients including modifications and strip downs for corporates. But then again, shouldn’t companies be doing that if they want to promote their brand and squeeze in more sales? Apparently not, as Mitra added, "We are not selling commodity but luxury. Numbers are not the prime focus today".
On the other hand, Audi seems to be going in all guns blazing as they envisage the fiery plan of opening a new outlet in India every 5-6 weeks. Michael Perschke, Head of Audi India also mentioned that Audi wanted to go deeper into the Indian auto industry and will be entering newer cities including Nagpur, Goa, Lucknow and Coimbatore.
As for BMW, its X1 is said to be a major part of its sales figure. So what do Audi and Mercedes-Benz have to do to compete with the leading luxury car maker in India? Nothing. Mitra blames the lack of a product in this segment for the absence of the volumes Mercedes-Benz is looking for. "The real test will be when we have a similar product in our kitty" he said.
Regardless of what the execs have in store for their company’s future here in India, it cannot be denied that Merc as a brand and a standard of luxury has definitely taken a beating. Cheaper variants or not, Mercedes-Benz will have to tend to the needs of the urban Indian who now has a range of options to choose from – if it wants to enhance its footprint in India.
What do you think? Has the Mercedes brand appeal gone down in India?