We don’t intend to make cheap cars: Daimler

Mercedes to not manufacturer cheaper cars under a sub-brand for emerging markets like India

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With the rival BMW gaining ground in traditional Mercedes territories like India, the speculation was rife that Daimler may just produce cheaper cars for emerging markets like India. Some reports suggesting Mercedes mulling a sub-brand for cheaper cars in countries like India were doing the rounds in print and web media. However, in a recent statement, Dieter Zetsche, Chairman Daimler group has rubbished any such possibility.

According to Dieter Zetsche, Mercedes is a maker of premium cars, one of the strongest luxury brands in the world, and doesn’t require to be scaled down. “We are a premium car manufacturer and very successful in the segment. There is no benefit in expanding to the volume segment” he told Times of India.

About Mercedes-Benz losing market to BMW in India, and becoming the no.2 player in the year 2009 and 2010, he said “Competition is good. In any case, unit volume is not the top priority for us. Our aim is to grow in revenues”

While we agree and respect the first statement, where the Mercedes as a brand takes a conscious decision of not entering the volumes segment, the second statement about not being bothered about BMW’s advances in India doesn’t quite convince us. BMW have done a great job of lapping up volumes in a very short time displacing Mercedes from its top position in India. Mercedes should be bothered, if it isn’t and respond in a fitting manner. While healthy revenues theory is all good, volumes are important too, especially if you are a player as well entrenched in India as Mercedes. It shouldn’t be easy for new entrants to overtake you.

Audi India has also made its intentions of becoming the No.1 player in the Indian market very clear, so Mercedes can only expect the pressure to increase in the long run. Smaller players like LR, Jaguar and Volvo are also slowly but surely eating into the sales of the big three. We hope that under the guidance of Peter Honegg, the new Mercedes MD for India, the company claws back its market share and gets back its no.1 crown. Although with the BMW X1 around, it seems a little difficult.

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