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Mercedes still bullish about India

Notwithstanding its uninspiring performance in the Indian market, Mercedes Benz India Limited still seems bullish about this country. It plans to launch its A-class car in the Indian market, besides adding three more avatars of its E Series model in India -- the E-200, E-230 and E-250.

The decision to introduce the A-Class car in India is a strategic move by the German giant to make a dent in the price-sensitive Indian market. The A-Class is expected to be priced between Rs 1 million and Rs 1.1 million, half the E Series price.The E Series, introduced two years ago, did not do well at all in the Indian market. The A-Class is expected to hit Indian roads in the second half of 1999.

Company officials said the A-Class will be launched in the Indian market after slight modifications to suit the environment.

Significantly, the A-Class failed the Elk test conducted by a Swedish magazine in the last quarter of 1997. The car turned over while rounding a sharp curve, which was part of the test. The accident has caused much speculation about the vehicle's safety.

Mercedes officials claim the flaw has been rectified and the car is 100 per cent safe now.

The proposed price for the A-Class car will be slightly higher than its prevailing price in the European market, which works out to about Rs 900,000. The higher price will be on account of the 40 per cent excise duty on the complete or semi knocked down kits the company will have to import, a company official points out.

The high import costs and the slump in the luxury car segment, he added, are the reasons for waiting till 1999 before launching the A-Class in India. By 1999, Mercedes Benz will have achieved higher indigenisation at its manufacturing plant. This will help the company price its car more competitively.

The newly added models in the E Series, now being built at the company's Pune plant, will be priced at Rs 2.19 million, Rs 2.38 million, and Rs 2.47 million respectively.