[sgiitk]

@xingamazon; You are forgetting one group which may be a major Merc target. Senior people nearing retirement, who have discharged most of their responsibilities, and are financially comfortable.

[mango_pal]

Originally Posted by xingamazon

Given the prices, the only people I see who will be interested would be the College going kids of the uber rich class people. Or the Sandeep's of High-class people.(name borrowed from Figo's campaign ).
It wont appeal for the Corporates nor would it appeal to the top-end Middle class people.
Merc should have done some research for sure and identified that there is a niche segment who's needs are not satisfied till date.

Kids of uber rich people, won't buy the A-Class. It will be too cheap.

Originally Posted by sgiitk

@xingamazon; You are forgetting one group which may be a major Merc target. Senior people nearing retirement, who have discharged most of their responsibilities, and are financially comfortable.

I don't see seniors buying this car. Its being positioned as a very sporty/young/glamour car. Black interiors, Sporty seats, the works.


I see upper middle class people who want to buy a D segment Corolla or Laura wanting to stretch their budgets.
In a place like Bombay, or other metros with a ridiculous amount of congestion, I see the well heeled opting to go the small car.

On the other hand who would do that?
Upper middle class people don't want to be seen buying a "cheap" Mercedes. If they can stretch their budget to 24 for the A then they can probably stretch it to 30 for the C.

Congestion? A vast majority of the well heeled are chauffeur driven. Why would they care about congestion? They want leg room.


The market is just the young crowd: college kids, fresh graduates, maybe young couples.

In the case of college kids, it will only be a handful of people, it won't be doing the price of the car justice. Parents who spend 20+ lakhs on their kids cars obviously drive something worth 3-4 times that. So they're narrowing down their base.

Fresh grads: Can't afford a merc. Even if they've graduated from ISB or IIM-A.
In that case, they would get an average CTC of 15-18 a year. There are too many expenses of starting a new life on your own. One would not want to be burdened by 30k EMIs every month. This segment as I have observed goes for B+ hatchbacks.

Young couples: Probably the only space that would be able to rope in numbers. Two well qualified working people does provide a huge boost to the standard of living as compared to one.


As long as the car isn't positioned as a lifestyle vehicle, like the Mini and the Beetle, and is priced realistically, it should sell reasonable volumes.

However, with the onset of the A3, 1-series and the Volvo V40, I doubt companies would manage to hit returns to scale, the size of the market is questioned.

This is a huge risk as its a completely unexplored segment in India (lifestyle hatches are positioned differently)

We can only wait and watch.

[agbenny]

Originally Posted by mango_pal

Kids of uber rich people, won't buy the A-Class. It will be too cheap.



I don't see seniors buying this car. Its being positioned as a very sporty/young/glamour car. Black interiors, Sporty seats, the works.


I see upper middle class people who want to buy a D segment Corolla or Laura wanting to stretch their budgets.
In a place like Bombay, or other metros with a ridiculous amount of congestion, I see the well heeled opting to go the small car.

On the other hand who would do that?
Upper middle class people don't want to be seen buying a "cheap" Mercedes. If they can stretch their budget to 24 for the A then they can probably stretch it to 30 for the C.

Congestion? A vast majority of the well heeled are chauffeur driven. Why would they care about congestion? They want leg room.


The market is just the young crowd: college kids, fresh graduates, maybe young couples.

In the case of college kids, it will only be a handful of people, it won't be doing the price of the car justice. Parents who spend 20+ lakhs on their kids cars obviously drive something worth 3-4 times that. So they're narrowing down their base.

Fresh grads: Can't afford a merc. Even if they've graduated from ISB or IIM-A.
In that case, they would get an average CTC of 15-18 a year. There are too many expenses of starting a new life on your own. One would not want to be burdened by 30k EMIs every month. This segment as I have observed goes for B+ hatchbacks.

Young couples: Probably the only space that would be able to rope in numbers. Two well qualified working people does provide a huge boost to the standard of living as compared to one.


As long as the car isn't positioned as a lifestyle vehicle, like the Mini and the Beetle, and is priced realistically, it should sell reasonable volumes.

However, with the onset of the A3, 1-series and the Volvo V40, I doubt companies would manage to hit returns to scale, the size of the market is questioned.

This is a huge risk as its a completely unexplored segment in India (lifestyle hatches are positioned differently)

We can only wait and watch.

I still couldn't understand fully who will be the prospective buyers for this luxury tiny car.
Probably for rich people might buy as a third or forth car?

Certainly this cannot be a first car for anyone.

[Bluebeem]

Originally Posted by agbenny

I still couldn't understand fully who will be the prospective buyers for this luxury tiny car.
Probably for rich people might buy as a third or forth car?

Certainly this cannot be a first car for anyone.

Merc has left everybody perplexed but you're Bang on !

This will be a rich guy's 3rd or 4th car. Which will classify it as a lifestyle product. If Mercedes were trying to hog customers of any other category, say people who are looking for a superb or Laura, they would provide some features to top those cars. But sadly it isn't. There may be a few cosmetic stuff like, on board computer /sat nav etc. but I don't think that's enough meat to sway a prospective sedan buyer.

First time merc/bmw/Audi buyers will never graduate from a sedan (jetta/civic/Laura/cruze or SUV ) to a hatchback ! Some petrol heads would do it for a RWD powerful hot hatch. But the A class doesn't make that cut either.

My take - unless this car has a diesel variant costing less than 20L - it will end up as a lifestyle choice and end up doing a few hundred cars a year at the most.

[mango_pal]

Originally Posted by agbenny

I still couldn't understand fully who will be the prospective buyers for this luxury tiny car.
Probably for rich people might buy as a third or forth car?

Certainly this cannot be a first car for anyone.

Originally Posted by Bluebeem

Merc has left everybody perplexed but you're Bang on !

This will be a rich guy's 3rd or 4th car. Which will classify it as a lifestyle product. If Mercedes were trying to hog customers of any other category, say people who are looking for a superb or Laura, they would provide some features to top those cars. But sadly it isn't. There may be a few cosmetic stuff like, on board computer /sat nav etc. but I don't think that's enough meat to sway a prospective sedan buyer.

First time merc/bmw/Audi buyers will never graduate from a sedan (jetta/civic/Laura/cruze or SUV ) to a hatchback ! Some petrol heads would do it for a RWD powerful hot hatch. But the A class doesn't make that cut either.

My take - unless this car has a diesel variant costing less than 20L - it will end up as a lifestyle choice and end up doing a few hundred cars a year at the most.

Not necessarily a lifestyle car. If it was positioned that way, people would rather buy the Mini or the Beetle. Both are more funky and unique than the comparatively more practical A class. So the market share of the A class would suffer.
What market share? Those cars have probably scraped past a dozen units - just about.


With easy finance options, the merc could appeal to fresh grads who have secured fantastic jobs and even young couples fresh out of B-schools of which there are plenty.
When your initial annual household income for a two person family is 30-40 lakhs with increments every year, then affording a niche hatchback is firstly affordable. Secondly much more practical to run a small hatch rather than a huge Superb or comparatively large C-Class or 3 Series.

Don't forget, that Merc would not want everyone to be able to buy this car. They still need to retain the image of their brand as "premium". They will not be targeting 1000+ units a month. Even if they roll over 100 cars a month. That's 1200 cars a year.
Last year, they sold a shade under 7200 cars. The launch of this car at 100 units a month could result in an increase in volumes of up to 20%.

Additionally, profit margins are relatively higher than the D1 and D2 segment. Considering that volume of the car is smaller, basic engines from the existing fleet would be offered and the cost of the badge plays a larger effect.

I would not be surprised if their own sales target is 50-100 units a month.

[motorworks]

One of the best looking cars from mercedes offlate. But this is a non starter in India.
Audi is due to be launching a proper sedan based on the A3 hatch, which is not a great looker, but will be a more "aspirational" car compared to the A-class.
Mercedes too have a sedan based on this A-class, called the CLA, but that is apparently longer than the current gen C class hence it may not really make it to india now, may be later as a c-class alternative.
But mercedes has missed an opportunity here, for developing countries a smaller sedan would have made better sense in terms of volumes.

Audi is clearly going to be numero uno in India out of the german trio.

[Bluebeem]

Originally Posted by mango_pal

Not necessarily a lifestyle car. If it was positioned that way, people would rather buy the Mini or the Beetle. Both are more funky and unique than the comparatively more practical A class. So the market share of the A class would suffer.
What market share? Those cars have probably scraped past a dozen units - just about.

With easy finance options, the merc could appeal to fresh grads who have secured fantastic jobs.and even young couples fresh out of B-schools of which there are plenty.
When your initial annual household income for a two person family is 30-40 lakhs with increments every year, then affording a niche hatchback is firstly affordable. Secondly much more practical to run a small hatch rather than a huge Superb or comparatively large C-Class or 3 Series.

I have my doubts on this. Having graduated from tier 2 B school 4 years back let me share my experience. At the time of graduation in 2009 the average salary of my class was 10.5-11 lacs (IIM-A average was about 12 lacs) . This is about 14 lacs in today's terms if you adjust for inflation. There was about 5 couples who met each other in class during our MBA and eventually got married. Today these couples make at least 30 lacs a year combined. None of them have even thought of buying a car. 2 couples staying in Dubai have bought second hand cars - as public transport is sooooo expensive there !

For all these couples the first priority remains paying off their education loan ( almost everybody in class including me had/have an education loan). Second priority and the bulk of their salary goes in housing (rent or instalment). Living in bangalore,mumbai, Delhi or chennai ( that's where bulk of them are) you can imagine how expensive housing can be. They're virtually left with very little to enjoy a healthy lifestyle and travel once or twice a year.

Originally Posted by mango_pal

Don't forget, that Merc would not want everyone to be able to buy this car. They still need to retain the image of their brand as "premium". They will not be targeting 1000+ units a month. Even if they roll over 100 cars a month. That's 1200 cars a year.
Last year, they sold a shade under 7200 cars. The launch of this car at 100 units a month could result in an increase in volumes of up to 20%.

Additionally, profit margins are relatively higher than the D1 and D2 segment. Considering that volume of the car is smaller, basic engines from the existing fleet would be offered and the cost of the badge plays a larger effect.

I would not be surprised if their own sales target is 50-100 units a month.

Very interesting !
I always thought merc was making the first move in this segment to turn its tables around in india and see a massive boost in sales to achieve no. 1 again.

[spyder918]

Originally Posted by mango_pal

Don't forget, that Merc would not want everyone to be able to buy this car. They still need to retain the image of their brand as "premium". They will not be targeting 1000+ units a month. Even if they roll over 100 cars a month. That's 1200 cars a year.
Last year, they sold a shade under 7200 cars. The launch of this car at 100 units a month could result in an increase in volumes of up to 20%.

Additionally, profit margins are relatively higher than the D1 and D2 segment. Considering that volume of the car is smaller, basic engines from the existing fleet would be offered and the cost of the badge plays a larger effect.

I would not be surprised if their own sales target is 50-100 units a month.

I agree with you but not completely.. remember what A-class is offering is the latest features, build (engine+body) almost equivalent to its sedan big brothers and even more vibrant style.. and only minus is the boot !! still to arrive to such price is indeed a decision welcomed.

It is though, a different aspect who would want to buy the car. If I want to roll my new product from an existing region to a new region, I would definitely launch keeping the same reputation in mind.. and thats what merc is doing, it is targetting the young generation here.

You'd actually need to evaluate from the Specs and Features with its rivals with similar price range to come up with a winner.. and from what I see it is offering outside india, if the features are not compromised with given price, it is already a winner up there for me.. The only thing I would take in account is the boot !!

[mango_pal]

Originally Posted by Bluebeem

I have my doubts on this. Having graduated from tier 2 B school 4 years back let me share my experience. At the time of graduation in 2009 the average salary of my class was 10.5-11 lacs (IIM-A average was about 12 lacs) . This is about 14 lacs in today's terms if you adjust for inflation. There was about 5 couples who met each other in class during our MBA and eventually got married. Today these couples make at least 30 lacs a year combined. None of them have even thought of buying a car. 2 couples staying in Dubai have bought second hand cars - as public transport is sooooo expensive there !

For all these couples the first priority remains paying off their education loan ( almost everybody in class including me had/have an education loan). Second priority and the bulk of their salary goes in housing (rent or instalment). Living in bangalore,mumbai, Delhi or chennai ( that's where bulk of them are) you can imagine how expensive housing can be. They're virtually left with very little to enjoy a healthy lifestyle and travel once or twice a year.

There are two aspects that I can think of right now.
Firstly, the people who take a 10-20 lakh education loan for their post grad will not buy the car. It will appeal to those who's parents are reasonably well off and have managed to sponsor their kids' education. That category of parents may drive C2, D1, D2 or premium cars.

Secondly, most B-school grads I know are into their first rented home and they don't know where they will be in the next 5 years, that depends on numerous different factors.
A car is one thing I've noticed that everyone in this category buys or is given.

(It could be that we're on two different ends of the spectrum in terms of the B-Schools and the ratio of people who have taken a loan, are looking to settle down and have other financial obligations)

The more you earn, the more chances you'll get a good car.
Mercedes would not want to cater to the person getting an average salary. They would cater to those who are in the exceptional category with a ctc of over 20l in their first jobs.
Otherwise, many would buy a car in this category. Would Mercedes want that?

Originally Posted by spyder918

I agree with you but not completely.. remember what A-class is offering is the latest features, build (engine+body) almost equivalent to its sedan big brothers and even more vibrant style.. and only minus is the boot !! still to arrive to such price is indeed a decision welcomed.

It is though, a different aspect who would want to buy the car. If I want to roll my new product from an existing region to a new region, I would definitely launch keeping the same reputation in mind.. and thats what merc is doing, it is targetting the young generation here.

You'd actually need to evaluate from the Specs and Features with its rivals with similar price range to come up with a winner.. and from what I see it is offering outside india, if the features are not compromised with given price, it is already a winner up there for me.. The only thing I would take in account is the boot !!

The model that was shown at the premiere was a CBU. I asked if the same features would be offered in the CKD's. They pointed out a handful of factors that would not.
The things they pointed out differed from SA to SA. So we can be sure that there would be quite a few things scrimped on.

For arguments sake though, how much would all these features really contribute to? They're available in the B, C, CLA now, even some in the E!
It doesn't take long to achieve economies of scale for these additional features.
The VW Golf costs much less than the Audi A3 with similar specs

An other factor that you've not taken into account is the engine. With the A180, they're going to be using the most basic and inexpensive units that they produce.

Transmission - common 7 speed DCT from the A to the S
Suspension - same platform as B, CLA
Interior - Ditto to B (don't know about CLA)
The MID or whatever - as the case with BMW's iDrive - Common throughout the range.
Engine - Same as B with the option of that underpowered 180 diesel which produces less power than a freaking Duster.

The only new thing about the car is the chasis and the lights et al.

[spyder918]

Originally Posted by mango_pal

The model that was shown at the premiere was a CBU. I asked if the same features would be offered in the CKD's. They pointed out a handful of factors that would not.
The things they pointed out differed from SA to SA. So we can be sure that there would be quite a few things scrimped on.

All I would add up here that a buyer will just not look to engine when he is buying a premium brand like Merc, but the brand value and the overall package offerred.. It would be sad to know that the CKD's would miss out on some features.. can you recall from your discussion with SA, and name which are not ? would not be a confirmed news but would give a idea on pricing and expectations..

[mango_pal]

Originally Posted by spyder918

All I would add up here that a buyer will just not look to engine when he is buying a premium brand like Merc, but the brand value and the overall package offerred.. It would be sad to know that the CKD's would miss out on some features.. can you recall from your discussion with SA, and name which are not ? would not be a confirmed news but would give a idea on pricing and expectations..

With the segment that they want to target - in their minds it is a car only for college kids. Power matters.
All stupid youngsters want to out race that idiot tourist cab who drives like an auto.
For sane drivers like you and me, its probably a relief that they wouldn't launch a "hot" version.

IIRC, he said that the CKD ones will only start being available by Jan '14.
The features that won't be present are:
- Electric seats for the passenger
- Optional 17" wheels (with that hideous flowery wheel pattern)
- MID might be optional
- Leather seats as on the display car
and some other stuff which I can't recall.

Not a very tempting car for me personally. I'm not too fond of its looks. With 110 bhp, I'd rather get a Ford Fiesta which would probably be as tough to find as this little one. Considering it has barely crossed the 3 figure mark and at least that car handles beautifully and the Gertrag DCT is a gem of a gearbox.

I pray that BMW at least gets its 128i. In a city like Bombay, with just two people in the house, I would buy it in a flash.
245 bhp to the rear wheels in a tiny hatch is my idea of brilliance. And IMO, the 1 series is a beauty of a car. An absolute beauty.

[djpeesh]

* Merc isn't looking at the 15-20 lakh price range
* Decision for CKD of A and B class will be taken in 2014. No decision as of now.
* May 30 is the A class launch and June is the diesel B class intro

[mango_pal]

Originally Posted by djpeesh

* Merc isn't looking at the 15-20 lakh price range
* Decision for CKD of A and B class will be taken in 2014. No decision as of now.
* May 30 is the A class launch and June is the diesel B class intro

- On road they (SA) say would be about 23-24 in Mumbai
- They're going to start producing the A Class in the Pune factory even for export markets. In which case, they are bound to introduce the CKD.

[djpeesh]

Hey Mango_pal
Spoke to the senior management. Their export plan hasn't yet been finalized. It's hinging on the EU-India FTA. Hence, they are still to take a call on CKD assembly for the A. I heard this yesterday. So it's fresh as can be. Of course, they could be talking through their hat as well.

[vb-saan]

I am a bit surprised by some of the reactions on this thread. So what we are essentially saying is that Mercedes should not bother to launch this car in India because it’s a hatchback and is not expected to do big sales numbers?

I am actually quite impressed by the fact that Mercedes is showing the courage to bring in their entire range to India. At least they are taking the Indian market seriously, and not diluting the brand by bringing in only selected models or the so-called made-for-developing market cars. Same is the case with BMW. I predict the 1-series to do really well in our market. It almost has the space of the X1, quality is top notch, and they have some brilliant engine options.

Until last year, the entry to the big-three German world was via Corporate / CE versions of the 3 series, X1 etc. IMO, a fully loaded A-Class / 1-series is much better than a bare-bone X1 for 25 odd lakhs. Ok, the 3-series, A4 or C-Class offer better space and prestige of a sedan, but those cars in a comparable trim-level will cost close to 40 lakhs on-road.

Thinking of the 15-18 price bracket, the only player who got a ready-product in there is Audi. They have the A1 in hand which is based on the Polo, and if they think of bringing an A1 sedan (a Vento in Tuxedo), it maybe hailed as a pricing marvel and could sell well.