Daimler AG, the manufacturer of Mercedes Benz cars, has set up a wholly-owned subsidiary, Daimler Financial Services, with an equity capital of $50 million (about Rs 225 crore). The company, registered in Chennai, will lend for purchases of Mercedes-Benz cars and (later) BharatBenz trucks.
Mercedes-Benz sold about 3,800 cars during the first half of the year and intends to sell 7,000 cars by December, which compares well with 5,820 cars sold last year. Three out of four Mercs sold are financed.
Addressing a press conference, Mr Klaus Entenmann, Chairman of the board of management of Daimler Financial Services, said the new company will finance and lease Mercedes-Benz cars to begin with. Daimler Financial Services aims to build its book to $500 million in India in five years, he said.
India is the world's sixth largest car market and the only market reporting a growth of 31 per cent, said, Mr Peter Honegg, Managing Director and CEO, Mercedes-Benz India.
Mr Sidhartha Nair, Managing Director, Daimler Financial Services India, said the company would distinguish itself by product differentiation. Going forward, it would offer leasing services – a concept that has yet to catch on in India, but one that certainly would. It is cheaper to lease a Merc than own it, Mr Nair said. Should you wish to insure your new Merc or the Benz truck, Daimler Financial will again help you. It has a tie-up with Bajaj Allianz for this purpose.