The Hindu Business Line : Merc puts E class variant on hold

DaimlerChrysler India has put on hold its petrol variant of the E class (E 280) till the last quarter of this year. This is due to the shortage of kits with the company. Mr Suhas Kadlaskar, the Director of Corporate Affairs and Finance, said that the company manufactures the variants as per market demands. The petrol variant was launched in January this year while the diesel one was introduced in March.

The E-class is assembled through CKD (complete knock down) kits imported from Germany. Import of kits is based on a quota system that the Indian subsidiary avails of from the parent company DaimlerChrysler AG.

Facing shortage

The quota is the total number of kits to be ordered based on market analysis and requirement with the help of local dealers. Due to an overwhelming response of the new variant, the company is usually short of kits. According to media reports, a similar situation has occurred earlier, with the previous E class models (W210), when they were launched in India.

Sales of the petrol variant were exhausted within three months of the launch primarily due to a large corporate deal worth 100 units. With rise in petrol prices and the diesel variant priced cheaper (Rs 48.48 lakh) than the petrol (Rs 49.95 lakh), the company started pushing diesel sales ever since it was introduced in March.

Though sales haven't dampened primarily due to the company having enjoyed a monopolistic competition, analysts believe that shortage of kits and new entrants like Audi and BMW may eat into DaimlerChrysler's E class market share in the near future.