Hans-Michael Huber, CEO & Managing Director, DaimlerChrysler India

Associated with class and status, Mercedes Benz is synonymous with the premium segment of the automobile industry and is the present market leader as far as market share is concerned. With the increasing competition in the segment, the leadership position hasn’t changed but Mercedes is ensuring that it takes steps to maintain its leadership position.

In conversation with Noor Fathima Warsia of exchange4media, Hans-Michael Huber, CEO & Managing Director, DaimlerChrysler, talks about the steps the company has taken to ensure growth and about how important the Indian market is to this global premium automobile player. Excerpts:

Q. Would you call India an important market for Mercedes?

India is an important market for us, which is why you see us indulge in various activities here. Even though in the present state-of-affairs, our presence here is not as much as it is in various other markets but it is growing at a good pace and, as I had mentioned before, there is quite a lot that we are expecting from the Indian market due to the economic growth in this country.

Let me first tell you that it’s not true that the ‘E’ Segment isn’t growing. Most of our growth in the past year has come from this segment. That said, right now we are not looking at bringing anything in the lower priced segments, though that is always an evolving decision.

The growth is definitely not in conformity with the international growth that we see – it is much larger! As you know, globally China and India are seen as markets that are flourishing at present and have much to offer in days to come as well. Between these two countries, we can say that the growth is more or less the same, even though it wouldn’t be wrong to say that China is growing faster.

There are various reasons that have led to this. To begin with, there is quite a lot happening in the automobile industry presently that encourages and makes it easier for people to buy a car. You know of the various promotion schemes, where people have to just pay over Rs 2,000 presently for a car and other kinds of loans and easy finance. In that sense, it is much easier to buy a car now.

Another aspect here is the number of two-wheeler owners in the country. They are definitely far larger in number than car owners. So there are a lot more people here that can be converted to four-wheelers vis-à-vis the number of car owners in the country.

In terms of market share, we are present in the ‘S’ and ‘E’ segments only right now. And we have almost 80 per cent of the market here, which makes us the market leader. In the context to sales, the average growth we saw last year was about 25 per cent.

We are seeing cars from Honda and Toyota entering the ‘D’ class right now, which does compete with our ‘C’ class but that has not effected the sales of our ‘C’ class. This implies that despite competition, we still maintain our position. But the fact is that the success of the brand has created competition and we would also see this trend in the ‘S’ and ‘E’ class soon.

Being a prominent player in the premium class and associated with status and style, we definitely have to be very specific in our marketing. There is a certain segment that we have to speak to and we largely do that on the on-ground level in various cities.

There is nothing else that you can sell to the Mercedes customer than an experience. We try to do that in various ways. One is through arranging events like the Mercedes Trophy, where we get our customers together. The Mercedes client doesn’t need an opportunity to play golf but they would like to meet the other Mercedes families. These are the kinds of factors we keep in mind in our marketing endeavours.

The pace of growth in the premium segment has been a steady one and, of late, has even seen an increase. New variants entering the category and new players coming in is an indication of that. However, it cannot be said that there has been a dramatic growth in this segment over the years. But given the improving economic conditions, that is what is expected now.

There have been quite a few. One is the entry of the ‘E’ class model which has been singularly responsible for driving growth in the category. People now feel that there is a car they are willing to pay Rs 40 lakh for.

Not really or rather not on a noticeable scale. Again, the reason can be seen in the fact that not much is done in the premium or the bigger car segments that would enable people to buy these cars. Though we would want that to happen!