Achtung! German war on local roads is heating up

British marquees Jaguars and Land Rover have hit the local roads, but for a long time now, Germans have been in the driver’s seat of the Indian luxury car market, thanks to the technische vortrefflicheit — or technical excellence — of their sleek, swanky, cutting-edge offerings.

By selling 8,500 units annually, the Deutsche trinity of BMW, Mercedes-Benz and Audi continue to comfortably rule the super-premium cars segment in India.

That’s not about to change anytime soon. What probably will, is the pecking order.
After leading for a long, long time, Mercedes-Benz surrendered crown in January when BMW sales sped past.

Not bad for a company that debuted only in 2007. BMW’s aggressive dealership strategy, cool quotient and unconventional designs helped.

The lapping also brought the race alive, for second runner-up Audi now is trying to do a BMW.

“Audi, which started its India operations in March 2007, has been increasingly trodding the BMW route. BMW’s focus has been on dealership expansion, while Mercedes has focussed on discounts. Audi pitched on advertising,” said an auto analyst, not wishing to be named.

Though BMW’s products are more on the lines of Mercedes — and vice-versa — they are similar to Audi in their positioning.

Mercedes is projected as a chauffeur-driven car for older executives while the other two are sporty, youth cars to be driven by their owners.

Peter Kronschnabl, president, BMW India said he has already chalked out an extensive dealer strategy to support growth plans.

“At present, 13 dealers represent us in India. We will further expand into markets such as Ludhiana, Bhuba-neshwar, Jaipur and Coimbatore by the year-end,” Kronschnabl said.

Audi is doing pretty much the same thing.

Benoit Tiers, managing director, Audi India, said company has already expanded its dealerships to 11.

“The first-ever terminal architectural concept dealership in India opened in May in Kochi and we plan to open more such dealerships this year.  Audi expects to strengthen its dealership network by entering Tier II cities,” Tiers said.

Though Mercedes Benz has been in India longer than its rivals, it has just 12 dealerships catering to 25 cities.

Shrawan Raja, an avid industry watcher, said BMW’s product portfolio, which is quite extensive unlike Mercedes’, plays to its advantage.

“The two carmakers’ products are entirely different from each other, though similarly priced. BMW 5 series, which is pitched against the E-class, has done exceedingly well due to its controversial design. It has given people something different, a refreshing change from the typical looks of a Merc,” said Raja.

Wilfried Aulbur, managing director and chief operating officer, Mercedes-Benz India, agreed there is always a chance customers could turn to BMW in search of variety.

Ashish Nigam, an analyst with Antique Stock Broking, feels Indians are slowly getting over their ‘Merc’ fascination and accepting BMW and Audi as cars with equal ‘prestige factor’.

Among the three German brands, Audi is the best when it comes to both performance and luxury, but is yet to establish itself fully here, say analysts.

“The BMW 3 series, which competes with Mercedes C class, outperforms the Merc by a yard. Even at the higher end, the 5 and 7 series are giving the E and S class a run for their money,” said Nigam.

In the sports utility vehicle (SUV) segment, Mercedes has almost lost the battle to the M class. “Competition in the SUV space is between BMW X5 and Audi Q7, and BMW X3 and Audi Q5. The Cayenne is also doing well and is easily the fastest of the lot.” The new E class, which is Mercedes’ only launch this year, could help its product portfolio,” he said.

BMW had said it was introducing 6 new products in India.

On the other hand, Mercedes has only two new offerings — the new E Class and the AMG.  “We already have the full range of models in India. Unless innovations happen in our headquarters at Germany, we can’t bring new products to the country. We are looking forward to the launch of the new E class, which will happen sometime later this year,” Aulbur said. The company is trying to offer choices to customers through engines.
“If you look at the E class, for example, we have 230, 280, 220 CDi, 280 CDi in the classic, elegance and special edition variants,” Aulbur said.

Raja pointed out that BMW is way ahead in introducing innovative products. For example, X3, which is an SUV based on the 3 series sedan, is a new concept. Similarly, X6, a combination of a hatchback and SUV, has no rival.

Interestingly, the German carmakers don’t seem worried about Jaguar Land Rover.
That may well be the case, but if Indians take a liking to the hoary, exotic supercats and the sleek, square-ish Rovers, an Anglican flank will open up in the intra-German war.