Next from Mercedes, a car made just for India

German luxury car maker Mercedes Benz India is looking an India-specific car to be able to take a bigger bite of the local market.

“We have not decided any time line for introducing this car yet. But before we launch such a car we need to have huge volumes,” Uwe Jarosch, chief financial officer and management board member, said.

Audi has a special car specifically designed for the Chinese market. “Company’s R&D centre in Bangalore would also help in developing the car,” he said. Further, Mercedes is also planning to double the workforce this year at its R&D centre from 600 employees currently. This will also help in providing development support to Germany.

The luxury car market in India grew 48% in 2010.

“There was a time when Mercedes was the only player in the luxury car segment in India, but companies like BMW and Audi have posed a strong competition. Most of the Mercedes-designed cars are suitable for international infrastructure. But an India-specific car will add to the company’s overall value proposition. The Indian luxury car market holds a lot of promise and this might further generate volumes for the company,” Mohit Arora, executive director at JD Power and Associates sai.

The company is also coming up with brand centres in four cities. Starting with Delhi, it will open such centres at Bangalore, Chennai and Mumbai.

“These will be more like huge display showrooms having a lounge-like ambience. Investment in these centres will be from the dealers’ side. These centres will have a capacity of displaying around 20-25 vehicles,” said Jarosch.

As Mercedes completes 125 years globally, it has big plans for the Indian market.

It plans to launch M class and GL class vehicles this year, initially through the semi knocked down route. It would gradually move to completely knocked down route depending on the volumes.
It also plans to introduce small engines for C and E class cars in order to bring down the cost of the vehicles.

The company’s closest competitor —- BMW —- had recently introduced the SUV - X1 in the Indian market at a price range between Rs22-29 lakh. The vehicle is expected to be the volume generator for the company and will further give stiff competition to Mercedes for the number one position. Asked if the company would look at something similar to X1, Jarosch said, “We are definitely looking at it, but nothing in confirmation.”

Mercedes sold 5820 cars in calender 2010 as against 3,250 units in 2009, posting an 80% growth.

The company recently announced plans to set up a paint shop unit in Chakan. It will spend Rs250 crore to develop this paint shop, which will be ready by 2012.