New Delhi: The old man’s car tag for Mercedes-Benz in India has been bothering Peter T. Honegg since he took over as the German auto maker’s local head in March.
“That’s not the reality,” said Mercedes-Benz India Pvt. Ltd’s new managing director. “Even our competitors have equal number of old boys in their list of customers. But we can’t help it... That’s the biggest problem we are facing in this country.”
Circuit countdown: The Formula One track, currently under construction, in Greater Noida. Photograph by: Ramesh Pathania/Mint
A worried Honegg, 55, sensed an opportunity to rid that tag when he read about Formula One, or F1, tracks being laid for the Indian Grand Prix. The races are scheduled for October and will be held at the specially designed Buddh International Circuit in Greater Noida.
Mercedes-Benz as well as Renault SA and Ferrari SpA, who have a negligible presence in the country, hope to leverage the hype surrounding India’s first Grand Prix by holding customer activities and marketing campaigns.
All three car makers are associated with F1 internationally.
“F1 is the pinnacle of motor sport. This is for the people who are interested in automotive R&D (research and development), into sports, racing and top speed,” said Honegg. “It gives us an opportunity to change the perception of being old. We want to challenge this perception and reverse the brand perception.”
So what will he do?
“I will keep it simple,” Honegg said. “We are going to follow whatever we have done in China and Malaysia.”
To begin with, the company, which has its own F1 team Mercedes GP Petronas and provides engines to the McLaren and Force India teams, will open a driving academy in India that will offer certificate courses to race enthusiasts. The academy will have former F1 drivers as trainers.
“We have a platform where professional drivers show what our cars can do. We want to go one step further and want to host an event, maybe two-three times a year, in the race course in Delhi or at Chennai with trainers,” said Debashis Mitra, director (sales and marketing), Mercedes-Benz India. “We will provide the cars and might combine it with a race.”
The company will arrange a roadshow in Mumbai by the end of September to allow race enthusiasts to get a feel of F1 cars.
Mercedes-Benz also plans to bring in its F1 drivers—the legendary Michael Schumacher and Nico Rosberg—to India for interacting with its customers.
“It is difficult to bring them here during a busy schedule, but we are working on it,” said Mitra.
A marketing expert with a leading research firm said the FI-related activities will not help Mercedes shed its image.
“It’s a global and old perception related to the company and changing a perception takes a long time,” this person said on condition of anonymity. “The company has to understand that it has to be a long-term activity.”
While Mercedes has been in India since 1995, Renault and Ferrari introduced their models in the country only in recent months.
“We are very excited about the first F1 race in India and are looking forward to it as we know that Ferrari has a lot of supporters in India,” said Ashish Chordia, chairman of Shreyans Group—official importer of the cars with the prancing horse logo. “We are evaluating a number of options, but will be able to share them closer to the event.”
Renault is betting on the racing event to reverse its fortunes in India. The company had to change its brand positioning in the country after its failed partnership with Mahindra and Mahindra Ltd for the Logan sedan.
“Renault’s problem is not of poor image, but about no image,” said Pradeep Saxena, executive director, TNS Automotive, a marketing research firm. “They will be operating from a clean slate and from there the chances of success for Renault are more.”
Renault’s connection with F1 goes back about 30 years. At present Renault does not run an F1 team on the circuit “but we continue to remain committed to the sport by supplying engines to four teams, ie., about 30% of the starting grid”, said Ashish Sinharoy, vice-president (communications and corporate affairs), Renault India.
Renault supplies engines to F1 teams Red Bull Racing, Lotus Renault GP, Team Lotus and Williams.
As part of its new campaign, the company will bring its Lotus Renault F1 show car to India. “The Lotus-Renault F1 show car is an original F1 car minus the engine and electronics,” said Sinharoy. “We will use the show car to do a series of static road shows across 8-10 cities in the country.” This will include displaying the F1 car along with its Fluence and Koleos models in places such as malls, dealerships and airports.
“We will also use our F1 connection to run competitions for the general public to build awareness about brand Renault and our production cars in India,” Sinharoy said. “Two major hotel chains have approached us to do joint promotions using the F1 show car at their hotels... The possibilities are really endless.”