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BMW, Mercedes find value-for-money works for them too

BMW, Mercedes find value-for-money works for them too
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First Published: Mon, May 10 2010. 10 20 PM IST
Updated: Mon, May 10 2010. 10 20 PM IST
New Delhi: BMW India Pvt. Ltd and Mercedes-Benz India Pvt. Ltd are discovering that the value-for-money proposition, generally associated with budget brands, is working for them too. By cutting down on some features and shaving a few lakh rupees off the price tag, they have been able to attract buyers who may otherwise have opted for top-of-the-range models from mass-market manufacturers.
Dubbed “corporate editions”, these versions of the Mercedes C-Class and the BMW 3-Series are attracting attention from buyers outside the initial target audience—rental agencies and fleet operators. The models, priced at around Rs25 lakh, have opened up the luxury car market for buyers who would have earlier thought of them as being outside their budget.
While the BMW comes with a price tag of Rs23.95 lakh, Rs3 lakh less than the fully loaded version, the Mercedes offering costs Rs26.27 lakh, cheaper by Rs6.22 lakh than the top end. The price range pits them against models such as the Toyota Camry, the Honda Accord, the Skoda Superb and the Nissan Teana.
“In February, we took a decision to make this car available through our showrooms,” said Peter Kronschnabl, president of BMW India.
In the three months since the launch, BMW has sold 305 3-series corporate edition cars, said Kronschnabl, describing the response as being at par with expectations.
The features that are missing in the corporate versions include sunroofs, parking sensors and automatic front seats, frills that won’t be missed by owners who mostly occupy the back seat in any case.
To be sure, such versions are available in other parts of the world as well and are especially popular in Europe, where buyers can choose from myriad specifications while ordering a car, such as opting for a cheaper music system or fabric instead of leather seats.
In India, however, firms are able to offer only a limited number of specifications as vehicles are shipped to the country in parts and then assembled at the factory site, making it difficult to strip down cars to meet individual requirements.
BMW had initially launched the car for the rental segment in October, without any advertising. As word spread, the firm started receiving enquiries from customers who suddenly discovered that a car with a premium badge was within their budget.
BMW’s success prompted Mercedes to follow suit with the launch of the C-Class corporate edition in April. For the time being, Mercedes is being more cautious in assessing the potential of the market.
“We don’t see the push that others have done in the market,” said Wilfried Aulbur, managing director of Mercedes-Benz India. For the time being, the firm’s focus is on corporate and not first-time buyers, Aulbur said, declining to provide sales figures for the models.
Both Mercedes and BMW said it is unlikely they will offer stripped-down versions of more expensive models in their line-up.
In the last fiscal, while BMW sold 3,941 units, Mercedes sold 3,760. In April, BMW sold 307 cars compared with 240 a year ago. Mercedes sold 321 cars in April, against 178 a year ago.
For the time being, Audi is staying away from launching such versions of its models. “We have enough demand for our cars with the Q7 limited edition doing very well,” a spokesperson said.
Some fleet buyers are not too keen on the budget versions. “These cars are more in demand among first-time buyers,” said Rajiv K. Vij, chief executive of Carzonrent India Pvt. Ltd, a car rental firm that ferries first class Emirates passengers to airports in Mercedes sedans. Vij said customers can tell the difference between a fully loaded car and a stripped-down version and he doesn’t want to take any chances.
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First Published: Mon, May 10 2010. 10 20 PM IST
More Topics: BMW | Mercedes | Luxury cars | Price | Model |