How Merc is wooing first-time luxury car buyers

One out of every five Mercedes-Benz sold in India is either an ‘A Class’ or ‘B Class’.

The German luxury giant is confident of growing in double digits this year, on the back of a lowered entry price for the two new hatchbacks.

Priced at Rs 25 lakh-26 lakh (Rs 2.5-2.6 million) and launched a year ago, more than 2,500 units of the A and B Class are running on Indian roads.

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A major chunk of the buyers are those who have never bought a luxury car before, followed by those who already have a Mercedes car in the family.

Boris Fritz, vice-president, sales and network development, Mercedes-Benz India, said, “About 20 per cent of our overall volumes are coming from the A and B Class.

“We have many buyers who are young professionals and who are not only new to the Mercedes brand, but also to luxury.”

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Incremental demand for the two luxury hatchbacks pushed Mercedes-Benz sales to 2,554 units in the January-March period, a growth of 27 per cent over the same period last year.

Last calendar year, the company recorded 32 per cent growth in sales to close at 9,003, as compared to 6,840 units sold in 2012.

Sales of luxury cars in India remain largely delinked from the depressed buyer sentiment seen in volume segments, which witnessed a fall of nearly four per cent in two months this year.

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According to luxury car makers, demand is pouring in from Tier II cities such as Chandigarh, Nagpur, Kochi and Raipur to name a few.

Mercedes-Benz, which is targeting sales of a minimum of 9,900 units this year, is the second largest luxury car maker in the country after fellow German rival Audi.

While the race for the numero uno position is on between the two brands, Audi kept the lead in the January-March quarter, with sales of 2,740 units.

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On Tuesday, Mercedes launched two limited editions of the A and B Class called Edition 1.

Only 100 units of both models would be available for sale, priced at Rs 26.71 lakh (Rs 2.67 million) and Rs 28.75 lakh (Rs 2.87 million), respectively.

Both models come loaded with features such as reverse camera, sun-roof and a variety of safety features.

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The company is struggling to meet demand for the two models as the mother plant in Germany, where the two models are made, is striving to increase production.

Both the models are imported in full but the company has localisation plans for India. “The decision (to make the A and B Class) has not been made but we will localise them eventually,” added Fritz.

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In view of this, Mercedes is doubling capacity to 20,000 units at its Chakan plant based in Maharashtra, which is home to the S 500 luxury sedan, one of the three exclusive units globally where the car is made.

The company has already launched four of the 10 new products lined up for this year. Last year, Mercedes launched eight new products across various categories.