By on January 4, 2010

Achtung! (

If you hear a loud screeching noise coming from the Stuttgart area, that’ll probably be Dieter Zetsche berating his Asian management team. The Economic Times of India reported that the Mercedes-Benz marque has lost its leadership of the luxury car segment in India to BMW after nearly ten years on top. Daimler also posted a 10.43% decline in sales in India, as volume fell to 3,247 units (if that doesn’t seem like much, consider that Mercedes also trails BMW in China by about 60k units to about 90k). And just like that, out come the excuses: “We are behind BMW in 2009 because of limited availability of our E-Class car … I don’t want to focus on leadership. We want to have a profitable growth,” Mercedes Benz India Managing Director and CEO Wilfried Aulbur told reporters. “We see a very strong growth in 2009 and it will be a blockbuster year for us. We are very bullish and we expect, it will be a high double-digit growth.”

However, Daimler have not hit the (semi) nuclear option of offering discounts to move vehicles. Wilfried Aulbur said “The focus is on profitable growth, overall discount is detrimental and it is not our focus. Just to generate volume is not a good strategy.” Herr Aulbur also believes that lack of uniform taxes on cars are also to blame. Aulbur said, “We need fair treatment across the line that will lead to volume and it will lead to investment. I want uniform tax for all car.” . According to the Economic Times of India, small cars are subject to an 8% excise duty while bigger cars are levied at 20%, with an additional 15,000 Indian Rupees for cars having engines between 1500cc and 2000cc, while cars with engines bigger than 2000cc have to pay 20000 Indian Rupees. Is Herr Aulbur seriously suggesting that a Hyundai i10 should have the same tax as a Mercedes-Benz E class? With logic like that, no wonder they’re losing market share in India.

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7 Comments on “Mercedes Falls Behind BMW In India...”

  • avatar

    In India and China, the S class isn’t a retirement cruiser, its a luxury limo.

    I’m sure the new E-class will sell really well all over Asia, but the C-class is so awesome for these small build  people that they could just as easily get one of those and be riding high.

  • avatar

    Most CEO’s would be screaming about having too much inventory stock piled. Now there is too little, and they are still screaming.  What’s missed here by the factory is the integrity of the product is much better served with demand exceeding supply. Maybe not good for the factory in a small way, however huge for dealers who need the strong revenue available by holding closer to the MSRP. This could mean the difference between life or death in a volatile world economy. … The BMW dealers I know in China are not making any front end profit on their cars right now. Which scenario is better?

  • avatar

    An sad article about high-end car sales in a country where a large percentage of the population does not have an education, drinkable water, food or housing.

    • 0 avatar

      For the price of one S-class, you could feed 50,000 Indian kids for a month.

    • 0 avatar

      Actually, you can feed a lot more than that. The price of a cheap S-class (S320 CDI) is 7,500,000 Rupees ($161,000 USD) and an S500L costs 10,000,000 Rupees ($215,000 USD) –
      For food, you eat quite well on 100 Rupees per day. In the slums, its probably more like 20 Rupees per day, if not less. So you could feed quite a lot of kids in India with that money.
      But again, folks who ride around in MB S-classes probably either don’t care about the poor or have done their due diligence through philanthropy and charity. So its quite a moot point, but interesting point anyway.

  • avatar

    I wish that Herr Zetsche would focus less on production volume, and more on the quality of build and materials.

    The Mercedes-Benzes I coveted as I was growing up had two key characteristics: Rock-solid quality and relative scarcity. Those things well justified their premium price.

  • avatar

    Mercedes’ problem is that they’re not really able to understand that they make mistakes.  All of the German marques do this, but Daimler is the worst: in their minds, everything they do is brilliant.  On top of that, there’s whole rafts of people who’ve built their careers enforcing this echo chamber.
    You can’t fight this once it’s taken hold, because any sign of reticence or admission of fault is seen as a critical weakness.  You can never be wrong, because if you’re wrong about one thing, you might be wrong about everything.  So you make damn sure you’re never seen as being wrong, and you build the house of cards ever higher until it collapses spectacularly.
    If this sounds a lot like the D3 in general, and the General in particular, it should.

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