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Old 18th July 2011, 18:00   #1
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Default Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

After the kickass discount of Rs 45,000 – Rs 55,000 offered on the City, Honda India has managed to breathe some life into City’s sales figures. Honda India said that the reason for the price cut was heavy localization due to which they were able to reduce the cost of manufacturing.

Well, it seems other manufacturers are also taking a leaf out of Honda India’s book and focusing on localization.

Mercedes India is facing intense heat from BMW and Audi in the luxury market. With Audi catching fast on Mercedes, their second spot is also in an endangered situation now.

Now it has been reported that the Mercedes Benz is increasingly looking at widening its portfolio of products manufactured in India to cut costs and shore up volumes.

Peter Honegg, managing director and chief executive officer of Mercedes Benz India Ltd (MBIL) said the company will assemble the well accepted M-Class in India shortly. It is definite that he’s talking about the next generation model, photographs of which was released online last month.

The local assembly will be part of the model changeover strategy.

In order to increase localization, Mercedes India will focus on its existing supplier base from which they source major parts for the C and E class.

Currently, from the Mercedes portfolio, the C and the E class are heavily localized with Indian components making up to 40-50% of the total product.

In order to increase localization levels, the company has also invested Rs 250 crore to set up a paint shop, which would be operational by the second half of the next year.


SOURCE - IAB

Last edited by RavenAvi : 18th July 2011 at 18:01.
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Old 18th July 2011, 18:05   #2
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

One of the things I look up to MBIL for is their eagerness to assemble cars here. The M-class does not even sell much yet they are looking to assemble it here to bring down prices. They have been assembling the S-class here even before the volumes of that segment grew.

The least BMW can do is to begin assembling the 7 series here. And Audi needs to assemble the Q7. It's high time these two players expand and exit the CBU route for major models.

This is in awake of the grid lock that has come about on the EU FTA as per todays TOI the treaty is stuck only become of the effects CBU duty cuts will have. Seems unlikely this will go through now.
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Old 18th July 2011, 22:27   #3
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

They are just too late to the party. The only 2 brands out there on everyone's mind right now are BMW and Audi. Mercedes is just way too expensive and whatever customers they would have had also flocked to the other 2 brands.

Mercedes just don't have the looks and performance to rue the new gen affluent youngster's hearts in India. If you ask me, even if they do localize and bring the prices down, Benz is still no match to Audi and BMW. Just my POV.
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Old 18th July 2011, 22:57   #4
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Well this is one segment which I do not follow but still I think its good that Mercedes is trying to increase the localization of parts. But does it not imply that the new parts will change the feel of Mercedes. I know Mercedes will accept local parts only after their stringent tests but I think there will be difference in the quality of a part manufactured here compared to the same part imported from outside. Does localization mean parts becoming a bit inferior in quality? This is just my perception and I may be wrong.
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Old 19th July 2011, 09:56   #5
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

According to insider news Mercedes is setting up bodyshop and paintshop in their pune plant space and capacity aimed to be 40,000 cars. this surely is positive sign that Mercedes will bring down prices considerably and will be competitive to BMW. I think BMW and Mercedes are now serious about their business in India. Good for Indian consumers.

Last edited by Nicky : 19th July 2011 at 09:59. Reason: more info added
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Old 19th July 2011, 18:03   #6
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Localization is great for the Indian consumers. With the rising trend of buying luxury cars, this move by Mercedes is surely in the right direction to stay in the game.

And the new designs of their cars everywhere is a glimpse of whats to come, even in India. They are definitely fighting fire with fire and tackling their design statement well.
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Old 19th July 2011, 21:33   #7
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

stanjohn123,

No offense but Mercedes-Benz is pretty much in every respect at par with BMW / Audi, in fact in a lot of spaces a lot ahead, designs maybe a personal choice but trust me in terms of technology / performance there is little left to be desired from them.

Coming to the localisation, it's great they do it, and like Sahil said, they have been assembling the S-Class from the time when volume was less than 7 cars a month even though the car was only for 54.45L INR approx at that time, I remember getting one of the first few S320's in a Almandine black.

Problem with localisation is seats, they will not be able to offer better seats, and the leather on India E-Class leaves a lot of quality, it's kinda hard and I have pointed this out at various places on the forum and also to Mercedes-Benz dealers.

But lovely to see them try to get to such high levels it will only benefit us the consumers as similar results will be tried by others too.

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Old 20th July 2011, 00:44   #8
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Quote:
Originally Posted by stanjohn123 View Post
They are just too late to the party. The only 2 brands out there on everyone's mind right now are BMW and Audi. Mercedes is just way too expensive and whatever customers they would have had also flocked to the other 2 brands.
Your post couldn't be farther from the truth. Even if Mercedes is no.2, take a look at the sales figures for Jan - June 2011 and you'll see how close they are to BMW. Just because BMW overtook Mercedes doesn't mean Mercedes has gotten any smaller. In fact, their sales for last year were about 3/4 up on the previous.

Quote:
Mercedes just don't have the looks and performance to rue the new gen affluent youngster's hearts in India.
Though I'm no fan of Mercedes' reliability and lack of long-term warranty packages, I'll give them this. The C Class is the best all-rounder in its segment right now, in terms of space, ride & handling. The E-Class is still more comfortable than the 5 (though the margin is slimmer) and the S-Class (despite its age) offers unparalleled luxury. The 7 & the new A8 don't match it for a 5 star experience.
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Old 20th July 2011, 00:54   #9
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Assembling cars in India doesnt mean that they will sell those in India only!
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Old 20th July 2011, 10:11   #10
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Quote:
Originally Posted by GTO View Post
Though I'm no fan of Mercedes' reliability and lack of long-term warranty packages, I'll give them this. The C Class is the best all-rounder in its segment right now, in terms of space, ride & handling. The E-Class is still more comfortable than the 5 (though the margin is slimmer) and the S-Class (despite its age) offers unparalleled luxury. The 7 & the new A8 don't match it for a 5 star experience.
Except for the bad batch of fuel injectors, I understand Mercedes have returned to form in terms of reliability. Lets await more data whether this is true!
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Old 20th July 2011, 10:20   #11
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Adding to what everyone has mentioned here already.

This news is from today's TOI. Mercedes is introducing the new "Now, lease a Merc at 50% of price" scheme in India. Here are the details of the scheme: http://timesofindia.indiatimes.com/b...ow/9290229.cms

Here's a small portion from the news

"One does not need to pay the full price of the car. Normally, as per the leasing model, we give the car on lease for a period of three years, working out a residual value upfront. This value, which on an average is 50% of the cost of a new car, is something the customer does not need to pay. All that he pays us is the remainder value of the car, which is nearly half of its cost. We lease the car to him."

I think this scheme will have good number of takers, however I can not gauge the riders in the scheme. It doesn't look very straight forward.

Anyone having a better explanation in plain English of this scheme? Will surely help.
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Old 23rd July 2011, 21:52   #12
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

Mercedes-Benz is the only car maker of the German trio that does not offer a 2.0-liter diesel unit in any of their cars.

While other manufacturers like Audi and BMW offer 2.0-liter diesel engines with the A4 and 5-Series respectively. This helps them to offer their cars slightly cheaper than Mercedes-Benz, which has been losing market share off-late.

Thus, the Stuttgart based automaker has decided to launch the C-Class and E-Class with smaller diesel motors in India. This will help the company to offer their cars at a cheaper price, attracting customers to its stable.

The smallest diesel engine in the C-Class and E-Class is the 2.5-liter diesel, which takes the company significantly more to manufacture compared to a 2.0-liter unit. The company is now developing a 2.0-liter CDI diesel heart for the C and E-Class and will put it on sale by the end of next year. The cheaper engine will also be utilized on the upcoming Mercedes compact (A or B-Class).

The lower displacement cars will also loose significant amount of equipment to help the company price the cars very aggressively.


SOURCE - Motorbeam (Mercedes C-Class & E-Class To Get 2.0 Liter Diesel Engines | MotorBeam - Indian Car Bike News & Reviews)
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Old 23rd July 2011, 23:47   #13
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Default re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diesels

The above article is absolutely untrue, Mercedes does offer the C220 CDI, which is a basic variant of the 2.2L engine which is also available in a lower tune of the 200 CDI, and even lower as 180 CDI so for them to say they do not offer is false information and what this simply means is they will probably launch the 200 CDI variant which makes no sense to me as it wont make much of a difference compared to the 220 CDI, and similarly BMW does not offer a 2.0L petrol variant in the 5 which the Mercedes does offer as the E200 CGI.

The 2.2 D motor is quite new and I can assure you there is no new engine block coming in, Indian media sometimes make huge errors in such reports and to top it off Mercedes India does make such mistakes too.

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Old 22nd August 2011, 21:38   #14
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Default Re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diese

Quote:
Originally Posted by GTO View Post
Your post couldn't be farther from the truth. Even if Mercedes is no.2, take a look at the sales figures for Jan - June 2011 and you'll see how close they are to BMW. Just because BMW overtook Mercedes doesn't mean Mercedes has gotten any smaller. In fact, their sales for last year were about 3/4 up on the previous.
I somehow believe Mercedes sales have been helped by their aggressive marketing strategy of selling 100-120 cars in some states though. I guess they did that 2 times and BMW has done it once. I will not dis agree with the sales figure though since in the end that's what really counts and maybe in that aspect you are perfectly right.

Quote:
Originally Posted by GTO View Post

Though I'm no fan of Mercedes' reliability and lack of long-term warranty packages, I'll give them this. The C Class is the best all-rounder in its segment right now, in terms of space, ride & handling. The E-Class is still more comfortable than the 5 (though the margin is slimmer) and the S-Class (despite its age) offers unparalleled luxury. The 7 & the new A8 don't match it for a 5 star experience.
I drove the C200 recently 2012 model and err didn't quite like anything at all about it. It wasn't fully loaded and it looked only good due to the AMG kit. The build quality obviously was exceptional but it lacked so many features for the price plus the well know reliability issues. I'm not trying to degrade Benz here in anyway but I feel they are lagging behind the competition at least international wise.
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Old 23rd August 2011, 15:54   #15
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Default Re: Mercedes Benz India to focus on increasing localisation & bring smaller 2.0 Diese

Quote:
Originally Posted by ajay_satpute View Post
Adding to what everyone has mentioned here already.

This news is from today's TOI. Mercedes is introducing the new ......

Anyone having a better explanation in plain English of this scheme? Will surely help.

Lets assume you are on the lookout for a 50 lacs Mercedes. So, you go to the dealer and ask him what are your options?

Dealer: Sir, the car is for 50 lacs. There are 2 deals available:

1. You buy the car for 50 lacs + tax and you drive the car home

2. You lease the car. The lease of the car is for 3 years. In this you pay some money upfront (say, 7 lacs) and then pay an EMI (say 50,000) for the next 12*3 = 36 months.

Once 36 months are over, you give the car back to me.

You: How does it help me if I lease?

Dealer: Well, you get to enjoy a brand new Merc for 3 years at half the cost of actually buying it. Plus, as the car ages there are maintenance issues that you don't have to worry about since you give the car back to me after 3 years.

----xxxxxxxxxxxx----

So,
What did you spend: 7 + (12*3*0.5) = 25 lacs to own a Merc for 3 years.

Lease = renting
It usually involves paying some money upfront to cover the depreciation in the car price and the taxes as you are using it for the first 3 years. Also, since the dealer has to sell the car at reduced price, he recovers the money from you.

Pros of leasing:
1. You get to enjoy brand new cars.
2. Maintenance is usually taken care of by the dealer.
3. Tension free driving

Cons:
1. There is usually a mileage limit on how much you can drive in 3 years (otherwise you will drive 100,000 kms in 3 years and cheapen the car price)
2. Too much money required and you still don't own the car after 3 years

Moral of the story: Leasing is for the rich or the stupid. Don't bother about it.
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