Mercedes Benz India Ltd has recorded a growth of 58 percent in the first six months of 2011 selling 3798 cars. Secondly, pre-owned luxury car market is now open for manufacturers. Mercedes has proved its mark in this sector by selling over 500 cars and made headlines with its bulk orders placed at Aurangabad. Debashis Mitra, Director, Sales & Marketing shared his views on sales, bulk orders, pre-owned car market with Hrishikesh Joshi Edited excerpts:
Are you satisfied with the latest sales figures of Mercedes?
Yes, with a robust growth of 58 per cent achieved in the first six months of 2011, we are well on track and are confident of ending the year on a significant high. The next six months will be even more exciting for the company as we have a mix of product launches planned for the Indian customers. We are also excited about the Formula-1 India debut in October 2011. Mercedes-Benz over the years has established a strong connect with the younger audience across the world and the wide acceptance of our products, be it the flagship sedans, the brand shapers or the SUVs, reiterates our strong market traction and brand value among our customers.
Is pre-owned luxury car selling business is a lucrative venture in India? If yes, how?
Yes, the pre-owned luxury car market has huge potential in India. With the new car market going strong with 70 per cent growth (as on 2010), the organised company certified used car market will grow proportionately.
Key factors fuelling this growth are increasing disposable income, evolving customer profile, highly unorganised pre owned car market, lack of direct used car imports due to taxation structure & demand of luxury cars at lower prices among others.
Studies suggest that about a third of the buyers of pre-owned cars are first time buyers (scope to bring new customers into the family), another third are exchange buyers (scope to up sell and offer new models to existing customers) while the balance third are add-on buyers (who enhance their fleet with the pre owned car purchase)
Indians today lead global lives, earn global salaries and the cars they drive reflect their lifestyle. As young entrepreneurs, professionals and corporates take the lead and with the emergence of strong economies in tier-II and tier-III cities, we foresee an increasing demand for luxury lifestyle; this will drive the demand for luxury cars in general and Mercedes-Benz in particular.
How is Mercedes' Proven Exclusivity Program doing?
Our Proven Exclusivity Program has been very well received across India. Since the inception of this program in India in June 2010, we have sold around 500 cars. The residual value of a Mercedes is typically higher by about 15-20 per cent as compared to similar cars from competitive brands- this is because the quality, reliability and durability of the cars make them a great investment in the pre-owned cars market as well. The proven exclusivity program offers cars that are in excellent condition and come with a manufacturer backed warranty of 6 months / 15000kms.
We have an established dealer network across the country, they support the Proven exclusivity program at a retail level. Currently, the program has been rolled out in 11 cities through our dealerships in Delhi, Mumbai, Ahmedabad, Chennai, Hyderabad, Cochin, Bangalore, Chandigarh, Pune, Gurgaon & Kolkata. It empowers our dealers to offer better value to customers and further increases footfalls at the dealerships- hence this program is very well received by our dealer partners as well.
How are luxury carmakers planning to enter in the pre-owned sale business, and how is Mercedes taking it on?
In the pre-owned luxury car market, we have the first mover's advantage. Our Proven Exclusivity vehicles undergo stringent evaluation and refurbishment criteria, scientific tools for audit and inspection and are supplemented with manufacturer-backed warranty.
Our deep understanding of the market & changing customer profile coupled with a well-entrenched dealer network ensuring smooth rollout of used cars across India, we are well poised to take on competition. As such, more players entering the organised pre-owned car business will bring in more professionalism & efficiency thereby ensuring more choice for the customers.
Overall, we will continue to offer our customers the best in class product backed by our service warranty & receive additional support in areas such as financing, documentation and delivery.
Have you offered discounts on bulk order placed in Aurangabad?
Yes, it is true that Mercedes has offered discounts in this deal and there is nothing wrong offering it when you are selling more than 150 cars in a single territory.
Do you think offering discounts for bulk orders means erosion of brand?
In the luxury car business, like in most businesses providing discounts is not a desired option. It is a tool utilised by retailers to tide over short term market variations and ensure that market pull for products is maintained as per estimated values. Therefore discounting should not be utilised a long-term strategy. The same holds true for large value transactions.