The Hindu Business Line : DaimlerChrysler India's focus to remain on luxury car segment

DAIMLERCHRYSLER India, the Indian subsidiary of the German luxury carmaker, does not have any immediate plans to launch new models from the Chrysler stable. DaimlerChrysler is also said to have stalled the development of the China Concept Vehicle, a passenger car that was earlier on the drawing board and was being considered for a possible launch in emerging car markets like China and India.

Speaking to Business Line at the 7th Auto Expo here, Mr Helmut Petri, Executive Vice-President, Mercedes Car Group, DaimlerChrysler AG, said that the Indian subsidiary is expected to continue to be a niche player in the domestic passenger car industry and that it will retain its focus on high-end luxury vehicles. The German company is unlikely to continue developing the China Concept Vehicle, since the market conditions in countries like India and China have changed with local manufacturers entering the market, he said.

"We see India emerging as a strategic market for DaimlerChrysler's luxury car sales during the next 10 to 15 years. Currently, China is the most important market in the Asia Pacific region. But, the growth in China may not be stable over the next few years. Though India is small in terms of size, the market here is expected to be more stable," Mr Petri said. He added that the company had made very optimistic sales projections when it first entered the Indian market. But the company's sales targets and expectations from the Indian market are more realistic now.

Speaking about the effect of the rising euro on the company's costs and performance, Mr Suhas Kadlaskar, Director (Finance), DaimlerChrysler India, said that the company was hit by a near 35 per cent increase in input costs due to the rising euro, but the recent cut in customs duties should help offset a part of the cost increase.

The new parts hub and centre in Singapore, set up recently, which supplies components for the company's operations in Asia, enables the Indian subsidiary to get its requirements of parts within 10 days of ordering. This reduces the time lag and the shipping costs for receiving the components at the company's plant near Pune.

Sales up 31%

DaimlerChrysler today said its sales in India rose 31 per cent in 2003, powered by a surge in volumes of its `E' class model.

The company sold 1,581 vehicles in 2003, compared with 1,208 cars it sold in 2002. "All our models recorded a growth in 2003," said Mr Hans-Michael Huber, Managing Director and CEO of DaimlerChrysler India Pvt Ltd.

The `S' Class saloon sold 84 units, up from 72 in 2002, while sales of the `E' Class stood at 667 units over 392 in the previous year. `C' Class sold 746 units from 620 units a year ago. Sales of imported completely built units, however, dropped to 84 units from 124 units.

"We had not expected this kind of a growth for the year," Mr Huber said here at a press conference. However, he said that the company expects a growth of only 10-12 per cent in the current calendar year.

Mr Huber said the appreciation of euro against the rupee has hit the profitability of DaimlerChrysler India. The company made a profit of Rs 34 crore in 2003, down from Rs 38 crore a year ago.