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Old 8th September 2015, 23:50   #1
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Default Mercedes loaning cars to Government of India

Hey guys,

Came across this really interesting article on Mercedes temporarily loaning cars to the Government of India. Key points from the article:
- Government is organizing a massive India - Africa summit in October
- Over 50 leaders of African nations (there are 54 nations in Africa + 2 disputed) will be invited
- Government did not have enough high-end cars; no vendor could assure them of providing all the required cars
- This is where Mercedes stepped in and saved the day
- After a quick tender (for impartiality reasons) Mercedes will release 54 E-class cars for the duration of the summit
- Most interesting thing: The cars will go back to Mercedes dealerships, presumably on sale, after the summit is over

This leads to the following questions:
- What made them decide on the Mercedes E Class? Which other cars made it to the shortlist?
* HM Ambassador?
* Tata Safari?
* BMW 5/7 Series?
* Agreed that Mercedes cars have always been a sign of prestige and no African leader would be seen with out it. (side note: Entebbe raid anyone?)
- Wonder who the biggest vendors of such high end cars are in India and what is their inventory look like?
- Will these cars be sold on discount?

Here is the article I was referencing to:
http://economictimes.indiatimes.com/...w/48862655.cms

PS: Mods please move if needed. Thanks!
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Old 9th September 2015, 00:20   #2
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Default

An important question that needs answering is whether the end user will be made aware that it's a used vehicle or will it be palmed off as a brand new vehicle
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Old 9th September 2015, 00:47   #3
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Default Re: Mercedes loaning cars to Government of India

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Originally Posted by hell_raiser View Post
- Will these cars be sold on discount?
On the contrary, these should actually sell at a premium, given that these are fortunate machines to host the heads of the countries.

There should almost be zero damage due to usage in this sort of a summit, as the routes will be predetermined, roads well paved and being driven by probably Mercedes assigned drivers. There will hardly be any mileage built up.
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Old 9th September 2015, 08:02   #4
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Default Re: Mercedes loaning cars to Government of India

Interesting! I think these cars should be sold at a discount. Also hope Mercedes will be fully transparent about this escapade to the prospective owners.

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Originally Posted by 1100D View Post
On the contrary, these should actually sell at a premium, given that these are fortunate machines to host the heads of the countries.

There should almost be zero damage due to usage in this sort of a summit, as the routes will be predetermined, roads well paved and being driven by probably Mercedes assigned drivers. There will hardly be any mileage built up.
I wouldn't want anyone to be using my car prior to delivery when I am paying for a brand new one from the factory.
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Old 9th September 2015, 09:04   #5
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Default Re: Mercedes loaning cars to Government of India

Quote:
Originally Posted by hell_raiser View Post
Most interesting thing: The cars will go back to Mercedes dealerships, presumably on sale, after the summit is over
Quote:
Originally Posted by deetjohn View Post
Interesting! I think these cars should be sold at a discount. Also hope Mercedes will be fully transparent about this escapade to the prospective owners.
I have seen this a few times here in Singapore, normally with BMW. Brand new 5/7 series are used for global events, and later the dealership will sell it off on a discounted price. In my opinion it a great option for the customer.
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Old 9th September 2015, 09:53   #6
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Default Re: Mercedes loaning cars to Government of India

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On the contrary, these should actually sell at a premium, given that these are fortunate machines to host the heads of the countries.
BMW did something similar after shooting of MI in Mumbai , there were many support cars for crew & a fully loaded 7 series used to ferry Tom Cruise . This was picked by Local Dealership and sold at huge Discount , I am sure they must have tried to earn maximum by branding this a car of Tom Cruise / MI , would have been a different matter if he was to personally give the delivery to new owner so getting extra money for Diplomat cars is probably not going to happen .

I am curious if Government will allow Duty Free Imports or pass some benefits on Taxes ? equally interesting will be to know how do they plan to register these cars ? are these goings to be registered on Mercedes India name and later sold ?

Last edited by Turbanator : 9th September 2015 at 09:54.
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Old 9th September 2015, 09:56   #7
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Default Re: Mercedes loaning cars to Government of India

I hope this news is taken with loads of salt. No vendor could provide 54 high end cars for lease? No single vendor, perhaps. Just a couple of Travel Operators, Lease/Self-rentals could have provided that number easily.

This is just unwanted bad PR for Merc if they are going to sell these cars to customers as new.

I don't care if it's the President or pauper of a country; used IS used.
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Old 9th September 2015, 10:02   #8
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Default Re: Mercedes loaning cars to Government of India

If everything goes as planned, this looks like a win-win for everyone.

-Government gets the high end cars it needs
- Mercedes gets the bucks from the government and customers, plus forms a good image in front of the government
- Dealers too would not be short changed. I think the discount they give to customers will be more than covered by the fees they get from government and is shared between them and manufacturer(?)
- Customer gets a practically new car at a relatively higher discount.
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Old 9th September 2015, 10:27   #9
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Default Re: Mercedes loaning cars to Government of India


Mercedes will not get these cars back before December.
And, I am sure, they'll have made much more than what they will be worth. In the meantime, they will in all probability be deputed to one or the other minister's office. I wouldn't keep my hopes up of these landing up at a dealership anytime soon.
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Old 9th September 2015, 10:57   #10
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Default Re: Mercedes loaning cars to Government of India

A new E class is due in 2016 so a good way to discount the existing stock by selling them as second hand. Am sure the government might buy some of them for the various external protocol ministries.

Mercedes will spend Rs 6Cr through depreciation. They benefit as follows:

- Huge goodwill and leverage within the government for both Mercedes and Bharath Benz
- Exposure of the cars in the media
- Deeming the cars secondhand to offset discounting
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Old 9th September 2015, 12:27   #11
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Default Re: Mercedes loaning cars to Government of India

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Originally Posted by kiku007 View Post
I hope this news is taken with loads of salt. No vendor could provide 54 high end cars for lease? No single vendor, perhaps. Just a couple of Travel Operators, Lease/Self-rentals could have provided that number easily.

This is just unwanted bad PR for Merc if they are going to sell these cars to customers as new.

I don't care if it's the President or pauper of a country; used IS used.
If pre-owned websites are any indicator - Mercedes has quite a few models (unregistered, and Company registered) that they sell off within a 1-2 years of use. Of course, the end consumer is aware of this (in the case of unregistered cars) and often get a handsome discount.
Would be the cherry on the cake in a year once they are up for sale, and with news of the new model launching around the corner. Could pick these up for similar to what you would pay for a new Camry Hybrid! (Saw an unregistered E200 listed for 46L OTR pre-negotiations with 4Kkm on the odo. In comparison a new Camry Hybrid is 36-37L OTR).
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Old 9th September 2015, 15:23   #12
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Default Re: Mercedes loaning cars to Government of India

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Originally Posted by lamborghini View Post
If pre-owned websites are any indicator - Mercedes has quite a few models (unregistered, and Company registered) that they sell off within a 1-2 years of use. Of course, the end consumer is aware of this (in the case of unregistered cars) and often get a handsome discount.
Would be the cherry on the cake in a year once they are up for sale, and with news of the new model launching around the corner. Could pick these up for similar to what you would pay for a new Camry Hybrid! (Saw an unregistered E200 listed for 46L OTR pre-negotiations with 4Kkm on the odo. In comparison a new Camry Hybrid is 36-37L OTR).

Yes, this is exactly what they would do. Last year after all the launch edition S500s were sold out to customers, the media vehicles (used for previews and launch events), which had anywhere between 300-3,000Kms on the Odo were given to select dealers so sell at a heavy discount. Being Launch Edition CBUs and the highly attractive price (almost 20 lac discount), meant that even these cars didn't stay in the showrooms for too long. Also, they were unregistered, so technically the purchaser would be the first owner.
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Old 9th September 2015, 16:47   #13
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Default Re: Mercedes loaning cars to Government of India

Wouldn't Uber have 54 premium cars to spare for such an international summit? Even with the infamous "Surge Pricing", it would have costed the Govt. an order of magnitude lower had they gone the Uber route. Mercedes will make sure they get paid handsomely by the GoI for taking such a hit on market value of New E-Class cars. If rental tenders/contracts for the ongoing Mahakumbh (in Nasik) is anything to go by, these rental cars will probably end up costing the GoI upwards of 50% of the actual cost of purchase of the cars.

This is public money going down the drain and a German company profiting through it. It would have been alright had there been no services like Uber which can provide similar services for much lower price but not in this day and age.

A few additions I found after I wrote the above post:
As per the original tender document here: http://mea.gov.in/Portal/Tender/2078...derforCars.pdf
- Cars to be rented for 9 days on 8hr/100km basis: Oct 23rd to 31st 2015.
- As per the 'fair' tender, all rented cars had to be company owned (Effectively ruling out all App based cab companies)
- The original tender is for 300 Cars. 55 Luxury Sedans, 55 Safari Storme, 55 Camrys, 55 Corollas, 55 Large Vans, 15 Buses and 10 Closed Luggage Vehicles.
- The EMD is Rs.4 lakhs, Bank Guarantee is Rs.10 Lakhs. Typically, EMD+Bank Guarantee is, at its highest, 1% of overall Tender value (so Cost budgeted by GoI is at least Rs. 14Cr) .

Could someone submit an E-RTI to get to know the actual bid made by Mercedes Benz for supplying the 55 units of E250 / E350. Maybe if we get the actual figure, it will be easier for some of the readers here to negotiate properly for whoever is buying his new discounted E250/E350.

On another related note, I always thought why car manufacturers (esp. Tata Motors, Fiat India, Chevrolet, Datsun etc.) won't start their own app-based cab services with company owned cabs with company maintenance support. At least the old inventory which they end up selling for massive discounts due to various reasons would be put to more profitable use, the company would be able to showcase the reliability of their products and the General public would get a much more high quality cab experience than a fragmented Ola or TFS.
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Old 10th September 2015, 08:44   #14
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Default Re: Mercedes loaning cars to Government of India

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Originally Posted by antz.bin View Post
On another related note, I always thought why car manufacturers (esp. Tata Motors, Fiat India, Chevrolet, Datsun etc.) won't start their own app-based cab services with company owned cabs with company maintenance support. At least the old inventory which they end up selling for massive discounts due to various reasons would be put to more profitable use, the company would be able to showcase the reliability of their products and the General public would get a much more high quality cab experience than a fragmented Ola or TFS.
Some issues that I foresee in this case are,

1. The car manufactures are primarily in the business of making and selling cars.
2. The need to set up a dedicated business unit that focuses on the application, a call center and also a business division to manage the cars and the drivers.
3. Registering and maintaining 100's of cars running on taxi permit, with the additional hassles of yearly road tax and fitness certificates.
4. Handling the permits and statutory norms for running the business.
5. Handling the traffic issues if any that come up when cars get into accident ( As the company owns the cars and are thereby liable).
6. After all this, the cars will not be able to make money as cab aggregators like Ola sitting on piles of investor cash can afford to undercut them and continue to grab market share.
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Old 23rd October 2015, 12:23   #15
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Default Government of India to get 55 Mercedes E-Class cars on lease

The Ministry of External Affairs, Government of India, has placed an order to lease 55 Mercedes-Benz E 250 CDI sedans. These cars will be used for ferrying visiting foreign dignitaries comprising Head of States, Presidents and top diplomats, starting with the upcoming India Africa Forum Summit (IAFS).

Mercedes loaning cars to Government of India-new-eclass_1.jpg

The E 250 CDI is powered by a 2,143cc, 4-cylinder diesel engine that develops 201 BHP @ 4,200 rpm and 500 Nm pf torque @ 1,600-1,800 rpm. The car uses a 7-speed automatic transmission and has an ECO start/stop function.

Mercedes loaning cars to Government of India-new-eclass-_2.jpg

The E 250 CDI is equipped with features such as full LED headlamps, electric sunroof, 17-inch alloy wheels, Artico upholstery, ambient interior lighting, cruise control, electrically adjustable seats with memory function, 3-zone automatic climate control, airbags, ABS, ESP and an Audio 20 infotainment system with a 14.7 cm screen, 6 CD changer, USB and Bluetooth connectivity among others.

Mercedes-Benz has sold more than 30,000 units of the E-Class in India since it was introduced in 1995. The company claims that it is the largest-selling luxury car model in the country.
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