Mercedes-Benz, the German luxury car manufacturer, is all set to release its ‘Smart’ brand and some compact cars in the Indian automobile market with the help of Renault-Nissan’s manufacturing unit of Chennai. This particular alliance between both the firms, started in 2010 April, is about to find a mutual ground in India. The expediency analysis for the Smart ‘Fortwo ‘ and it’s another upcoming model, ‘Forfour’, has been done earlier for the Indian automobile market. However, the models will come to the market only by the year 2014 as per sources. According to many senior executives of Mercedes, the Franco-Japanese car manufacturer’s Rs 4,500 crore of investment for its engine and car manufacturing unit in Chennai, which is just next to its parent firm Daimler’s truck manufacturing facility, is most probably going to be used. The basic idea behind this is to be mutually benefitted of a reduced cost structure by sourcing common parts and developing the engines together in order to bring themselves towards competitive pricing.
There has been much reason for this kind of collaboration, which is not a joint venture at all. According to a senior executive of Mercedes, “Indian automobile market is one of a kind, where anyone has to make a very logical strategy in order to succeed. The firm realizes a strong need to localize in the Indian market. With Renault-Nissan, the company is considering a common platform accession for they need lower displacement engines. This particular idea brought both of them together to utilize this opportunity for mutual benefit.”Although this is a car small in size, it can’t be kept in the category of entry-level vehicle, at least not in terms of pricing. The tag would be somewhere between Rs 10-15 lakh. It will be more like a luxurious city car targeted at a more affluent clientele.
10,000 Smart models were sold last year in China alone. It is to be noted here that China and India go very much alike when it comes to Automobile markets. The company is very positive on one thing here, even if they don’t sale 1,000 a month, it will also do if they sell at least 300 units a month. By the end of 2012, the B-Class hatchback by Mercedes will be launched.This will be the firm’s first compact car in India. This will be followed by a smaller A-Class in early 2013.
Chairman, India Board and Vice-President for Global Sales, Mercedes, Mr Matthias Luhrs said, “the firm sees huge potential of growing with their compact cars when it comes to volume. They have plans to establish a paint shop and study the chances of complete manufacturing in India, if possible, an engine to axle to most probably every major spare part of a car. In coming few weeks when the board meetings will take place, they would further discuss the investment plans which will be required for expansion in the capacity.”