Mercedes-Benz India: A New Strategy for Growth

Peter Honegg, the CEO of Mercedes-Benz in India, has acknowledged that the company was caught off guard in the country's rapidly growing automotive market. Despite entering the market about a decade earlier than German rival BMW, Mercedes-Benz found itself ceding pole position to its competitor in 2009. However, under Honegg's leadership, the company is now planning to change its strategy to regain its position. In an interview with Mint, Honegg discussed the challenges of doing business in India, the country's unique market characteristics, and the company's plans for growth.

Key Takeaways:

• India is a country with a lot of small cars, and its automotive market is growing at a faster pace than China's, but still lags behind China's development.
• Mercedes-Benz sold around 5,000-6,000 units in China in 2001-02, and Honegg had predicted that the company would sell 70,000 units by 2010, which was a bold forecast at the time.
• To participate in India's growth, Mercedes-Benz plans to increase its offerings of diesel cars, expand its dealer network to 5-10 outlets per year, and bring in new models below the C-class, such as the A-class and B-class, on a complete knock-down (CKD) basis or production basis.
• Honegg acknowledges that competition from BMW has been growing, and he expects Jaguar to be a tough competitor in the Indian market in the long run.
• To change the perception that Mercedes-Benz is an "old man's car" in India, Honegg plans to focus on sportiness and is considering partnering with a cricket player as a brand ambassador.

Statistics:

• Mercedes-Benz sold around 150,000 units in China last year, which is 24 times more than its sales in 2003. (Source: Honegg, 2011)
• India is the world's second-fastest growing major economy. (Source: Not explicitly stated in the article, but mentioned in the context of China and India's growth rates)
• BMW was selling more cars in India than Mercedes-Benz last year. (Source: Honegg, 2011)

Sources:

• Honegg, Peter (2011). Interview with Mint.
• McClatchy-Tribune Information Services.