Mercedes plans Rs 15-20 lakh cars for India!

German premium car maker Mercedes-Benz is looking at expanding its portfolio by introducing A and B Class cars in the country within two to three years, to take on competition.

Mercedes is likely to price these cars between Rs 15 lakhs and Rs 20 lakh. The cars will be brought to India via CKD route.

These two segments will help Mercedes capture a customer base that seeks luxury at a price range lower than the C-Class price bracket.

With high local content, it could help Mercedes to price the cars competitively.

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The company had ruled the Indian luxury car market for 15 years but lost to compatriot BMW for a second time last year. Mercedes clocked sales of 5,819 units as compared to 6,246 sold by BMW in 2010.

Peter Honegg, managing director, Mercedes-Benz India, said, "We do not have enough locally assembled products in India. My current portfolio does not allow me to compete with my competitors at this time. We are going to introduce the A and B Class cars here; we have to assemble these locally to bring in volumes."

Local assembly would enable the company to price the cars competitively. The management team in Germany is considering a proposal to see if the A and B Class cars can be assembled in India.

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Mercedes-Benz India currently does not offer any product in a price range where models such as BMW's X1 exist, he added.

BMW assembles this sports utility vehicle at its Chennai plant and sells it at a starting price of Rs 22.4 lakh (ex-showroom, Delhi).

Honegg said the company would meanwhile work on strengthening its position in the segments it has products. "We want to keep our market share in our core segment, for C, E and S Class products and simultaneously extend our portfolio in different directions."

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Mercedes-Benz India assembles C, E and S Class luxury sedans at its Chakan (Pune) unit, which can produce up to 10,000 units annually in two shifts.

The cheapest offering in the country is the C Class at a starting price of Rs 25.48 lakh (ex-showroom, Delhi).

The price range of E and S Class cars starts at Rs 39.7 lakh and Rs 84.34 lakh (both ex-showroom, Delhi), respectively.

The prices will go up further from Thursday by 1.5 to two per cent to offset the impact of rising input costs and adverse currency fluctuations.