Mercedes-Benz steers at India

Mercedes-Benz has launched an aggressive strategy to target the luxury sports car market in India, as it expects strong demand growth for high-end vehicles over the next 10 years.

Leading European luxury carmakers are looking to expand into one of the fastest growing emerging markets for high-end cars and Mercedes-Benz has picked India over China to launch its latest super sports car.
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“Enjoying luxury and investing in a Mercedes-Benz today in India is much more socially acceptable than five to 10 years ago,” said Wilfried Aulbur, chief executive of Mercedes-Benz India at the launch of the right-hand drive SLS AMG in New Delhi.

“For Mercedes-Benz, the sky is the limit in India. This car is a brand shaper. I do believe the Indian market will be one of the key markets for luxury cars worldwide and we expect strong double-digit growth over the next few years.”

China, which boasts more than 900,000 dollar millionaires, has already become a big player in the luxury car market and this demand is spreading to India.

According to Capgemini and Merrill Lynch Wealth Management research, India’s 120,000 dollar millionaires hold roughly a third of the country’s gross national income and this number is increasing rapidly.

“India’s luxury car market will grow in leaps and bounds over the next few years driven by two major trends,” said Mr Aulbur. “First, disposable incomes are likely to grow by at least a factor of five over the next five to 10 years and, second, there is a significant mindset change observable with Indian consumers.”

Mercedes-Benz India, which saw a record 79 per cent growth in year-on-year sales for the first half of this year, chose India for its second launch of the supercar after Germany, a strong statement from the company about how it regards the future potential of the Indian luxury car market.

Since its presentation in January, there have been 10 confirmed sales in India of the SLS AMG worth a minimum of Rs2m ($405,721) each and although Mr Aulbur declined to comment on sales projections, people close to the company said achieving a further 10 by the end of the year was a realistic target.

The company, which started trading in India in 1994, was a pioneer in the luxury car market, launching the E-Class in 1995. Mercedes-Benz has 30,000 cars on India’s roads and holds second place to BMW as the largest seller of luxury cars with Audi in third place.

While the luxury car market constitutes less than 1 per cent of the overall car market in India, it is growing fast. Companies such as Mercedes, BMW, Porsche, Rolls-Royce and Bentley have all set up manufacturing plants in India.

Meanwhile, Ferrari is looking to open its first dealership in Mumbai in the next six to eight months, entering the market at a time when supercar manufacturers such as Bugatti and Aston Martin are trying their luck.