Mercedes Benz is getting ready to begin leasing cars in the Indian auto market by year end. Currently, no other luxury manufacturer of cars offers their models on lease facility directly to consumers.
Mercedes would first begin leasing cars to companies, and upon further growth offers them directly to individuals on lease.
Peter Honegg, the CEO and MD of the company said that they were having serious discussions for leasing their vehicles in India by year end. By nature, Indians prefer owning cars in comparison to leasing, and they would consider leasing their cars to individuals at a later stage.
Dealers will purchase Mercedes cars through the company, which they would then lease to corporations for a specific period. After the end of this period, the vehicles would be returned to the dealer’s car pool, and would then be sold at through the company in the used car market, through their Proven Exclusivity. They are still preparing the details for the business model of this new venture.
This business will also allow them to get new models into their used car market. They would cars around 3 to 4 years old with them to sell in the used car segment. They will be able to get even more customers at low entry level by selling their used cars. Globally, Mercedes is among the largest dealers of used cars, and have 35,000 vehicles at present on Indian roads.
The luxury car market in India, is facing increasing competition with rival company BMW, overthrowing Mercedes by managing to have record sales in last two years. BMW managed to sell a total of 6,246 cars, against Mercedes’ 5,819 cars last year. Both companies are introducing new cars for expanding their portfolio in India, for gaining more customers in this rapidly growing market.
India’s largest maker of passenger cars, Maruti also sell cars on lease in India to public sector companies. The company’s chief GM, Shashank Srivastava, said that leasing causes an ownership experience that is hassle-free. In the lease period, the maintenance, drivers and car servicing is cared for by the company. Corporations pay a monthly rent for getting these cars.
While the figures are still small, they are slowly finding acceptance in companies. Maruti manages to lease about 600 cars per year to companies via financial institutions. About 25,000 vehicles are leased every year in India.