In India the automobile market is dominated by compact cars. To join the race

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in the small car segment, Mercedes Benz is planning to bring its small car, the A Class, to India, a top official said.

“The competition is heating up in the small car segment and we plan to bring our small car, the A Class, to the Indian market within two years,” Peter Trettin, president & CEO of Daimler, Central and Eastern Europe, Africa and Asia, said.

The A Class model has sold over 680,000 units worldwide since its launch in 2004. It was positioned as the trailblazer for a new vehicle segment.

Mercedes-Benz plans to expand its premium compact vehicle portfolio comprising the A and B Class from two to four models starting end-2011. The future models will offer product attributes that are already popular among A and B Class customers, such as a spacious interior. The models will also set a new tone through the introduction of additional variants and concepts.

Trettin said the company would position the A Class as its entry-level car in the Indian market. “It will be priced competitively to get a foothold in the market,” said Trettin. He was visiting the 100-acre greenfield plant at Chakan near Pune, in which the company has invested Euro 50 million.

Trettin said the Indian economy was growing rapidly and with it the aspirations of the people for better cars compared to the regions he was overseeing. “With the growth in the Indian economy, we expect the demand for our products to rise considerably,” he said.

Wilfried Aulbur, MD and CEO, Mercedes Benz India, claimed sales had picked up since December. “In 2010, the luxury car segment grew 80 per cent, but Mercedes Benz has grown 157 per cent and this is without the GL launch,” he pointed out.

The Mercedes Benz GL Class is a crossover sports utility vehicle and it matches, size-wise, Audi’s Q7 and BMW’s X5.

The company’s bus order book was full till September, mainly from the state transport departments, Aulbur said, but did not disclose volumes. “Demand in the market is picking up rapidly,” he added.

Trettin said the commercial vehicles market in India was doing well compared to other markets where sales had fallen by 90 per cent. “Eastern Europe and Central Europe were suffering and the company had to buy back stocks from the dealers and distribute them in other markets,” he said. The Middle East also saw a dip in commercial vehicles sales, he added.

Trettin said that from 24,000 trucks and 24,000 vans sold in 2008, sales were down to 9,000 each of trucks and vans in 2009.