FEATURE: INVESTIGATING INDIA – THE WORLD’S FASTEST GROWING CAR MARKET: MERCEDES EXPANDS IN INDIA

In a show of faith in the growing Indian automotive market, Mercedes-Benz India will expand its Dealer network into more small cities and towns.

The move includes used cars as well as new car dealerships, with the smaller areas expected to make up around 40 per cent of the car-maker’s sales volume in the world’s fastest-growing automotive market.

India, with a population of 1.3 billion and growing, is home to massive metropolises such as Mumbai (18.4 million), Delhi (22 million) and Bengaluru (12 million); large cities like Chennai (7.1 million), Hyderabad (6.8 million) and Kolkata (4.5 million), and more than 30 smaller cities with populations between 1 million and 4 million. It has countless small villages and regions.

The smaller markets presently contribute up to 25% of Mercedes-Benz’ sales in India. The luxury manufacturer plans to open more outlets in these areas in the next 12 months, expanding a Dealer network that is already larger than its rivals BMW, Audi and Jaguar Land Rover.

Michael Jopp, Mercedes-Benz India’s Vice President for Sales & Marketing, said the company would not only open more showrooms for new cars but also expand the certified used car business.

“In the next 12 months, there will be additional showrooms and service centres in Tier II and Tier III towns, and the existing facilities will also be upgraded to cater for the existing volumes,” he said recently.

At this moment, Mercedes-Benz has 95 new car dealerships in 45 Indian cities, as well as 17 for certified used cars. The German company started the pre-owned car vertical in 2014 and has so far sold around 12,000 cars.

Mr Jopp said the company had identified markets such as Amravati (population 646,000), Dharwad (1.8 million), Gandhinagar (300,000), Jalgaon (560,000) and Kutch (2 million) for opening outlets and was in talks with existing and new Dealers for the network expansion.

Mercedes-Benz overtook Audi as the top-selling marque in India in 2015. It sold 8,061 units in the first half of 2018, which represents growth of 12.4 per cent. Mr Jopp said the company would continue growing in double digits and maintain its leadership position in the coming years.

The electric vehicle market is currently not viable due to lack of volume; however, Mr Jopp said the company was looking for clarity regarding policy as well as a reduction on import duties in order to kick-start the EV movement.

“We are asking the government to reduce import duties so that we can first start importing and offer them at more competitive pricing and then start with local manufacturing,” he said.

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