Peter Honegg, MD & CEO, Mercedes Benz India

Mercedes Benz entered the Indian market in 1994 and reached the top 100 most trusted brands of India according to The Brand Trust Report, it won the Best Brand Award by Auto India Best Brand Awards 2011. Mercedes has been facing the heat since BMW and Audi have come into the picture and outstripped the sales of Mercedes, BMW took the throne from Mercedes in 2009 and Audi has managed to surpass its sales and take the second position for the last quarter of the fiscal year 2011-12. Even though Mercedes covers 37 cities, which is maximum in the segment of premium luxury vehicles with 61 dealerships across the nation, it has yet not been able to draw the new money towards itself.  In an interview with Pitch, Peter T Honegg, Managing Director and CEO, stated that Mercedes is now shifting its brand image from an old man’s car catering to an age group above 50, to a car that also defines one’s lifestyle in terms of sportiness and gives the young generation an adrenaline rush. Mercedes is trying to recapture its position by initiating test drives of the AMG units at the Bhuddh International F1 circuit and also its Star Driving experience with Farhan Akhtar that drew customers towards the brand. An overall analysis states that Mercedes has to work on the double to make its mark again, as Indians are now being cognizant about competitive premium luxury automobiles entering the country.  Excerpts:

The entry level luxury cars segment (below Rs 25 lakh) has been on a high after BMW’s X1 series launch. Mercedes-Benz India still does not have any offering in that segment. Are you ignoring this huge segment?
The game in the luxury car market changed a lot when BMW came in. They have changed the portfolio, launched X1 and now they are on top, the below Rs 25 lakh segment has become big and there is a huge opportunity. We will soon bring cars in this segment and we will again change the game in this space. Mercedes will be back on top in the Indian market by 2020.

So which models are you looking at launching in the below Rs 25 lakh segment and by when?
We are looking at bringing the B Class and then the A Class in the Indian market. That will mark our presence in the below Rs 25 lakh segment in the luxury space. I will bring more models as and when we feel that they will work in the Indian market. I will not bring any car in India that is not profitable.

What is your take on the SUV segment in the luxury space?
The luxury SUV segment has a huge potential. It is growing at about 50 per cent in India while the luxury sedans are growing at 25-30 per cent. Mostly, young consumers prefer SUVs in the luxury space.

We have the M class and the G class in the SUV segment. M class I think is a huge success story  for us. It was launched 3-4 years ago. In the first year we sold 100 units, in second 200 units, then in 2010 we sold 300 units and last year we have sold about 500 units. The SUV models which were not there at all in our portfolio until five years ago, now contribute 10 per cent to our sales.

 As far as the brand image goes, Mercedes has an image of an old man’s car amongst the Indian consumers. What do you have to say on that?  
Mercedes has been doing market studies and we have seen that Mercedes is well received in the age group above 50 years. In the age group of  40-50 years we are at par with the competitors and we are well received even in the lower age groups. Our  C 63 AMG model is quite a hit amongst the lower age group consumers.

What are your expansion plans in terms of dealership networks? Which tier II cities are your focus?
We have the strongest dealership network in terms of sales and after sales.  We have recently opened showrooms in Karnal and Nashik. We will soon be opening showroom in Bhubaneswar (Orissa). We currently have 71 touch points across 31 cities.