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Mercedes might bring sub-Rs 20 lakh model



German luxury car maker Mercedes-Benz on Thursday said it might bring in cars priced below Rs 20 lakh to gain volumes and regain the top slot in the luxury car market in the country.

“I will not eliminate the case that we will have a car below Rs 20 lakh,” said Peter Honegg, managing director and chief executive officer, Mercedes-Benz India Ltd. He indicated the A-Class scheduled for launch next year could be priced in this range. The company will also introduce a sports utility vehicle (SUV), based on the A-Class platform.

Honegg added, “In the next five to 10 years, 40 per cent of our new models will be priced below Rs 25 lakh...The premium segment, which is in the range of Rs 20-30 lakh, is witnessing good growth in India, while the luxury segment above that is flat.”

In a cut-throat competition to gain volumes in Indian marker, luxury car makers offer models at competitive prices Model  Price (ex-showroom, Delhi) Rs lakh Mercedes B Class  21.49-24.87 BMW X1  22.40-30.40 Audi Q3  26.71-32.10 Toyota Fortuner  21.15-22.32 Ford Endeavour  17.90-20.85 Skoda Superb  18-24.74 Volkswagen Passat  22-27.26 Hyundai Santa Fe  22.34-25.3

Luxury car makers have started gaining the bulk of their sales from entry-level models in recent times. While the BMW-XI (Rs 22.4 lakh) contributed nearly a third to the company’s sales in 2011, Audi registered 950 bookings for its latest offering, the Q3 (Rs 26.7 lakh), within three months of launch.

Mercedes, which had lost the top slot to compatriot BMW in 2009, is now facing stiff competition from Volkswagen Audi. It has sold a little over 5,000 units till September and is now looking at closing the year with sales at similar levels as last year (7,430 units in 2011). It is likely to slip to the third position after Audi, which is expecting sales of 8,000 units.

“Globally, our target is regain the number one position by 2020. In India, we will be fighting for the numbers game much ahead of it. By 2015-16, we will have the entire range of products from premium to luxury in India and that is when we will look at competition again,” Honegg said.

He said the company’s present aim is to remain profitable in times of severe pressure from adverse currency fluctuations, that has forced it to raise prices twice, by a total of four-five per cent in 2012.

To gain volume and remain cost-competitive, M-B will assemble all future volume-driven models in India. “Initially, we may sell some cars as imported models but after a certain period, all models which are volume drivers, will be assembled here. Even the B-Class, which has recently been launched, will be assembled,” Honegg said.

The company is investing Rs 250 crore to expand production capacity. The plant has a capacity to produce 10,000 cars every year on a two-shift basis and the company has the capability to increase it to 100,000 units in the next 10 years.

On Thursday, it introduced sport editions of its C and E class premium sedans. While the new edition of the C-class is priced at Rs 29.9 lakh, that of the E-class is offered at Rs 39.9 lakh (ex-showroom, Delhi).