With over 40 launches and a major player exceeding the coroneted 10,000 mark (units sold) in the first 9 months, the luxury car segment in India is set to break some existing records. In a market which has a capacity to roll out 50,000 vehicles per year in the next 2-3 years, the battle to lead the market has intensified between three German carmakers- BMW, Audi and Mercedes.
So far, last year’s Number two automaker Mercedes Benz is leading the race with more than 10,000 units sold in the first nine months of the year. Though the numbers are not out yet, the carmaker is said to have performed exceptionally well in the festive season. If the present trend continues, Mercedes is set to become the first luxury brand to ship 15,000 units form its plant in a single year. Mercedes’s C Class and recently launched GLE Class have been runaway hits.
Audi, which became the first company to sell 10,000 units in a single year is also riding high on accounts of multiple launches but it will be almost impossible for the auto major to retain its numero uno position this year.
The sale of 10, 000 units is a milestone for luxury car makers. Audi managed to breach the mark in 2013 and continued in 2014 with the sales of 10,851 units. Mercedes-Benz entered the elite group in 2014 with 10,201 units.
What the Companies are doing to be ahead in the race?
Audi, which mainly targets young buyers, has rolled out a new initiative that would enable customers to buy the company's vehicles through mobile showrooms.
The 'Audi Mobile Terminal', a fully functional mobile showroom, has been designed to provide a full Audi experience to customers - whether in a metropolis or a smaller city.
Audi India's Head Joe King had earlier said, "The Audi Mobile Terminal brings the showroom right to the customer's doorstep, especially in tier II and tier III cities in India, where the emergence of a progressive and discerning set of customers is contributing to the transformation of the luxury landscape in India," he added.
This is where the next phase of growth will come from and we are now future-ready, King said.
The terminal is slated to visit more than 30 cities over the next 12 months and will target around 2,000 customers across the country.
About maintaining the lead, he said the company is confident of maintaining its lead in India. "As of now, we are not ahead. But we are confident of being ahead by the end of the year. It's just a tiny number difference," King had told TOI in August.
While the success of Mercedes has been attributed to the aggressive product onslaught which the company claims to be the key reason for the surge in demand and sales.
The company is following a "15 models in 2015" product strategy which saw many launches that include, Mercedes-Maybach S600, AMG C 63 S, AMG S 63 sedan, S 500 Coupe, S 63 AMG Coupé, S 600 Guard, CLS 250 CDI, E 400 Cabriolet and many more. The 13th launch for the calendar year is the GLE (previous M-Class) SUV and the new AMG Class which is scheduled to be launched on November 24.
"This continuous sales success is a clear reflection of our customer-centric approach and our relentless drive towards creating customers for life. I am glad to see the India strategy bearing fruit, and we are well poised for entering Q4 with a very strong footing," said Roland Folger, the newly appointed MD and CEO of Mercedes-Benz India.
The chief reason why Mercedes has hit the bull’s eye is the perfect blend of royalty and sportiness in its cars unlike Audi which focuses more on the sporty side.
The other player in the big three is BMW. Though, globally leading the segment, the company hasn’t been able to regain its top position that it lost to Audi in 2012. Though, the company’s target base lies in urban centres like Delhi and Mumbai, it is now on a campaigning spree in smaller cities like Ahmedabad and Rajkot to boost its sales in tier-II cities.
The German car maker BMW is also looking to increase local sourcing of components, such as gear boxes and engines, to ramp up sales in India. "We started with our 2-litre diesel engine and are now making the 5-litre diesel engine here in India. We are aiming for 50 per cent localization,” said Philipp von Sahr, president, BMW Group India.
One of the important reasons why the company is low on sales but fairs well on balance sheet is the pricing policy of the cars. For instance, the premium SUV from Mercedes(GLE Class) has a price range Rs 60-70 lakh, depending on the variables whereas premium BMW SUVs costs over a crore. Recently launched X5M is priced at Rs 1.5 crore whereas the X6M costs Rs 1.6 crore, ex-showroom India.
When the BMW head was asked BMW’s strategy to regain its lost crown, he said in an interview, “Each company follows its cycle. We have a philosophy of sustainable profitable growth in India. We are not running after volumes, but are looking for complete consumer satisfaction. We have topped the sales satisfaction in the luxury vehicles segment and are ahead of our rivals in India, and are pushing for more ultra high-end models.”
BMW India sold more than 6,000 cars last year. It is No.3 in India in the premium segment, behind German peers Audi and Mercedes.
Talking about the history of competition between the three, Mercedes-Benz has been in the country for a longer period. The company had established its base in India 1994 while its chief competitor Audi, owned by Volkswagen AG, is the most recent entrant, starting in 2007.
In 2009, BMW India displaced Mercedes from the No. 1 position and by 2012, Audi due to its tremendous sporty appeal surprised its German peers to emerge the market leader. Since then it is able to hold on to its spot but it is clear now that Mercedes will regain its lost crown.
On the global frontier, BMW and Mercedes-Benz are ahead of Audi at the end of October 2105. Audi is trailing Mercedes after 10 months with sales of 1.497 million units. That compares with 1.531 million at Mercedes and 1.560 at luxury-car sales champion BMW.
BW Reporters
The author is Senior Correspondent with BW Businessworld
