Merc stays true to its luxury core

Eberhard Kern has reiterated on several occasions that his company is not in the numbers game vis-à-vis competition. Despite this, the Managing Director & CEO of Mercedes-Benz India will have reason to feel pleased with last week’s tally which showed an all-time high of 3,566 cars sold in January-March and 11,213 units during fiscal 2014-15.

Ever since Kern took charge of a somnambulistic Mercedes-Benz a couple of years ago, he quickly put things in shape. Sales were back on track thanks to a carefully planned product strategy and retail drive. Now in 2015, which the company has labelled ‘Live the Best’, Kern is determined to push the envelope even harder.

Numbers game As he explains, the year 2015 will focus on the number ‘15’ be it adding 15 dealers or 15 new products. The third, and most exciting dimension, is a new connect event with potential customers called Luxe Drive which will target 15 cities in 2015. It is about a luxury experience which includes Michelin Star chef, Vikas Khanna. “I must say the cuisine at the event is excellent,” says a beaming Kern.

Luxe Drive is not about targeting existing customers but to newcomers of the brand who need to be in touch with Mercedes. “It is about the luxury experience and connecting with this brand. We address customers of other (luxury) brands as well as those upgrading or people who do not have a luxury car yet,” he says.

For participants, it means nearly four hours of a luxury experience with a test track thrown in as part of the agenda. There are professional drivers who dwell on important issues like safety. “The concept of Luxe Drive is new and we will see how to take it to the next level in 2016 and thereafter,” says Kern.

This focus puts in perspective the positioning of Mercedes-Benz as a luxury brand where customers expect value for money. However, as its MD cautions, when one gets into the game of price cuts or stripping down a model, this very value ends up being diluted and becomes an issue during resale.

“We provide real luxury experience to customers and this encompasses the best in technology, equipment etc providing the full experience. This comes at a price and premium,” says Kern.

Aiming higher It is here that he has an interesting anecdote to narrate. Last year, the leadership team wondered how it would celebrate one year of the A and B class. It then decided to go for the creation of Edition 1 for these two models which meant more luxury at a higher price. These Edition 1 cars sold like hot cakes which only proved to Kern that Mercedes customers believe in the real luxury experience.

The launch of the CLA-class sedan some weeks ago also had an unbelievable response. “This beauty has just made the right connect with the result that we have a long waiting list which I do not like,” he adds jocularly.

From Kern’s point of view, an important takeaway in India is that there is a group of potential customers who might not have really soaked in the Mercedes experience before. This used to be a brand for people who had arrived in life. “Now with CLA, GLA, A, B and the new C class as well, we have a good portfolio of cars for people who are on their way as well. And this growing lot of younger people, which includes women, only means our customer base is getting bigger,” he says.

According to Kern, India is discussed regularly at the Daimler headquarters in Stuttgart. The country has been identified as one of the focus markets for trucks (with the factory in Chennai) and passenger cars.

In addition, there are over 2,000 engineers working at the R&D centres in Pune and Bengaluru. “It is quite a huge business for Daimler which is rapidly growing. India pleases and surprises us in equal measure,” says Kern. Of late, there have been some rumblings within corporate circles that things are not moving as quickly as one would have expected in the Narendra Modi-led BJP regime. The Mercedes chief, however, believes that change takes time in a democracy especially when “everyone has a voice”. He insists that things are on the right track with a focus on greater ease of doing business, infrastructure, GST etc.

“There is a democratic process at play and the Make in India focus on growth is a good thing which should show positive results. We have contributed to this initiative at Daimler and investments will only grow in the near future,” says Kern.

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