BMW to follow suit as Mercedez-Benz, Volvo launch small luxury cars to meet evolving consumer demand.
Mercedes-Benz?s entry into the luxury hatchback category with the A-Class has spurred activity in a segment that was largely non-existent in India, despite the country?s appetite for small luxury cars. While Swedish carmaker Volvo last week launched its V40 compact crossover, Mercedes? fellow German rival BMW is drawing up plans for its 1 Series car this year.
The compact luxury car segment is yet untested, but with India?s car market not out of the woods yet and the interest rates still high, the luxury auto giants are seeing promise in this segment that has so far been populated with niche brands such as Mini Cooper and Beetle. Industry experts say this would give them the flexibility to follow the two-pronged strategy of pushing ahead with their regular products while getting increased acceptance from the upper middle class.
The A-Class, which received 400 bookings within 10 days of the launch, starts at Rs 21.93 lakh (ex-showroom Mumbai), a price level that is on par with premium sedans from the likes of Toyota and Honda in the country. The Volvo V40, which launched in Delhi last Friday, carries an ex-showroom price tag of Rs 28.5 lakh.
?Our approach is production follows the market,? said BMW Group India president Philipp von Sahr. ?In order to achieve growth, we will resolutely expand our product range and cover all opportunities in the luxury car segment which are relevant for us.?
?2013 will also witness the launch of the first premium compact hatchback from BMW in India. The BMW 1-Series will also be locally produced at the plant in Chennai,? he said. The Munich-based car maker?s compact sports utility vehicle (SUV) model X1 had opened up a new vehicle segment when it launched in 2010, and it has now followed it up with an upgrade earlier this year.
The third German luxury car brand Audi has not spelled out its plans for the luxury hatchback category in the country yet. ?In India, when people spend a certain amount of money to buy a luxury car, it is still about price to size ? they are still looking for sedans and limousines demonstrating their indulgence in luxury. There is an emergence of achievers who have reached the pinnacle of success very early in their lives,? said Michael Perschke, head of Audi India, whose sales grew by 24.8% between January and May 2013, delivering 4,096 units as compared to 3,282 units last year.
?In Audi?s global portfolio, the Audi A3 sportback is a very interesting project. However, we need to be very careful with what kind of body style will be accepted by the Indian customers. Predominantly, India is a small car market and there is an increasing demand for premium and luxury sedans and SUVs,? said Perschke.
Mercedes-Benz, on the other hand, is willing to believe Indian consumers also are evolved and have a similar outlook as their global peers. ?This is the highest popularity that any Mercedes-Benz car has enjoyed in the decade-and-a-half long history in India. As a product, the A-class has broken many stereotypes, it pioneered the compact luxury segment in India,? said Eberhard Kern, managing director and CEO,
Mercedes-Benz India. ?The A-Class reflects the changing global trends of adapting to ?compact? luxury as witnessed in consumer goods categories like phones and electronics,? he added.
