Mercedes-Benz, the well-known German auto maker, is planning to play bullish on the Indian auto market by following the cost-cutting measures, which will eventually reduce the production cost for the company. According to sources, the auto major is fearing to pass the price increase proposal as it will further dwindle the demand for its vehicles in the Indian auto market.
In the first four months of this fiscal, overall sales of the German auto marque amounted to 1,633 units, witnessing a dip of around 24 per cent under the review of 2,141 units sold in the same tenure last year. The reason for the fall in sales was cited as the absence of cheaper models, between a bracket of Rs. 20-22 lacs, in the company's Indian portfolio.
In order to control the prices of its models, Mercedes-Benz absorbed 30 per cent of the inflation to avoid any further dip in the demands for its models. This year, the auto major increased the prices by 5-7 per cent in its entire portfolio, which were further hit by the impact of high inflation and unfavourable modifications in the government's taxation policy.
Availing tax benefits, the domestic arm of Mercedes-Benz assembles its some of the iconic models, including C-Class, E-Class, M-Class and S-Class, in the Indian Territory via Completely Knocked Down (CKD) operation, carried at its Chakan manufacturing facility based near Pune. Owing to the fact that the demand for company's best selling model, C-Class, just managed to drive in 2,000-3,000 units annually, Mercedes-Benz found it difficult to look for such dealers who could meet the demand of buyers in such low figures.
Bringing the future plans of auto major in limelight, Mercedes-Benz is planning to introduce a compact SUV in the Indian auto industry somewhere in 2014-2015. It is believed that the upcoming model of the company will be based on the A-Class hatchback, which is also anticipated to sparkle at the Indian shores before the end of next year. Coming back to the yet-to-be launched SUV, whose development is currently under process, it is expected that the model will be assembled at the company's Chakan plant. With a speculated price of Rs. 20-24 lacs, the car will efficiently square of against the likes of Audi Q3 and BMW X1.
With upcoming models slated to be launched in the market soon and adoption of price controlling measures, it seems that Mercedes-Benz is leaving no stone unturned to soon emerge as a leader in the premium car segment of the Indian industry by outpacing is country cousins, BMW and Audi.
