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In the clash, the top honours, at least for now, go to Merc, which lost the numero uno position to BMW last year but has regained ceded ground so far this calendar year and is only marginally ahead.
The clash more or less reflects the keen tussle between the two German carmakers worldwide, except that Audi is also an almost equally strong contender globally. In India the competition is evident not only in sales but also the number of models and their variants rapidly launched by them.
Sine January Mercedes Benz India has launched as many as 16 new models and variants, whereas BMW India has managed to put six cars on the road.
But the fight is hardly over. Both the companies plan to launch more cars at different price points, giving the consumer a wider platter of options.
The cars already launched by Merc this calendar year span a wide spectrum of models and variants -- from new the C-Class to SLS-AMG, priced between Rs 25.20 lakh and Rs 2.5 crore. BMW’s six new models fall in the price range of Rs 24.40 lakh to Rs 1.30 crore (all prices ex-showroom, New Delhi).
The flurry of launches has taken Merc’s total Indian portfolio to 24 models and variants. Yet, it is still behind BMW which has 29 models and variants in the Indian market.
Merc’s new cars have price points that indicate a focus on the entry- level and entry level-plus categories. BMW’s price points are widely spread out.
Merc now plans to fire another salvo by adding two or more products by the year-end. Not to be left behind, BMW too intends to launch one high-end luxury model later this year.
Asked about the rapid-fire launch of variants in such short span, Mercedes Benz India managing director Wilfried Aulbur said, “We want to give different varieties to different people, who will have options in terms of both price and class. We have seen many young buyers also in the past one year in the age group of 35-45 years.”
But it is not only about young age. In Aulbur’s words, it is all about being young at heart. Customers in the 60-65 age group but young at heart are also buying cars similar to those being driven home by younger people. “They could not afford such cars when they were young; so they fulfill their desire now when they can afford,” he said.
BMW is certainly giving up. The company’s spokesperson said the year was not over yet. “We still have four more months to go and we have another new launch in the form of Xi,” he said. He described the success of BMW not in term of product launches but in terms on investing in and researching on customer choice. “Leadership is only one factor. We know we will achieve many other factors such as financing in the years to come in India,” he said.
To those who have just arrived and want to upgrade to luxury car, Merc gives a larger choice in the lowest category than BMW does. The Merc C-Class, the lowest category, offers variants at 10 different price points in the range of Rs 25.20 lakh to Rs 35.25 lakh. In the lowest segment, the 3- Series, BMW has only four variants priced between Rs 24.40 lakh and Rs 33.95 lakh.
Beginning with the C-Class, Merc in India goes up to the SLS-AMG model which has a top price of Rs 2.5 crore from. BMW’s top segment, the X6 SUV, has a top price of Rs 1.3 crore X6 SUV.
So who is the leader in terms of pricing and product categories? According to most of the analysts Financial Chronicle spoke to, Merc as a leading company in the luxury car segment will definitely want to maintain its leadership.
And in order to do that it has to come out with new varieties of cars at still lower costs, whether in the same category or by giving enough a still wider choice of price points.
In 2009 the Indian luxury car market saw 9,000 cars sold, of which BMW accounted for 3,610 and Merc 3,247 cars. In 2008, Merc sold 3,625 cars, way ahead of BMW’s 2,908.
In the international luxury car market the battle for supremacy is between Merc, BMW and Volkswagen’s Audi. In the first half of 2010 Mercedes took the second spot in sales with 556,700 cars, or 1750 more than Audi. But BMW led the pack with sales of 585,755 cars.
S Ramnath, auto analyst at IDFC SSKI Securities, said, “The luxury car market is growing in India along with the expanding economy and the company that launches more variants and price them right will be the biggest beneficiary. More variants at the right price points would give more volumes apart from attracting customers to their showrooms.
He said Merc entered the Indian market much before BMW and thus seemed to have better understood the market. Clearly, the strategy of launching multiple products at different price points had worked for it. “Also, owning a Merc gives more brand value to the aspirational class,” he said.
“The fact is that in the last couple of years, many global luxury car companies have entered the Indian market. To retain the leadership position, Mercedes would be launching new models to attract customers,” Carnation Auto chief executive and ex-MD Maruti Udyog Jagdish Khattar said.
“Launching of new model, variant or limited edition is to gain the market share. Mercedes is doing in the luxury car segment what Maruti Suzuki is doing in the small car segment, launching new models,” managing director and CEO National Skill Development Corporation and ex-director general Siam Dilip Chenoy said.
Ernst & Young’s partner - risk advisory services practice (automotive), Kapil Arora, said, “In the longer term, it is about market leadership, as we would see an intense competition in the luxury cars segment in the next 2-3 years. More global players are also expected to come in this segment.”
Audi India, which came in third, sold 1,685 cars between January and July, a growth of 71 per cent over the previous year.
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