Mercedes-Benz eyes brand for pre-owned cars

Luxury car maker Mercedes-Benz India could start a new brand to sell pre-owned cars under its existing dealership tie-ups this year.

"As an organisation we are actively looking at this proposition and this is high on our priority list," said Debashis Mitra, director, sales and marketing, Mercedes-Benz India Private Ltd (MBI). He added that in India the used car market is not a very organised one, and cars are usually sold through dealer driven initiatives.

Currently, MBI is working on ramping up the existing dealer network that includes 13 dealers having outlets at 25 locations. "The existing partners are in the process of investing around Rs150 crore to upgrade facilities, add new space to the dealerships. Around Rs 45 crore has already been invested and the remaining would be spent within this year," Mitra said. Part of this Rs150 crore upgradation plan would be spent on developing these new spaces that will house the used Mercedes section at existing dealerships.

"The demand for used cars is steadily growing, especially from customers who want to own a Mercedes but are uncomfortable with the price tag and already own a premium sedan," said Hiteshwar Singh, chief executive officer, Interkrafts, the only MBI dealership in eastern India. Mercedes has sold around 17,000 cars in the country since its entry in 1995. Currently, around 25,000 Mercedes cars ply on the Indian roads that includes cars that were shipped from abroad, informed company officials.

The luxury car segment had clocked a 76 per cent growth in 2008, and Mercedes registered a 46 per cent growth in luxury car sales last year selling 3,600 cars. It has already sold around 400 cars in the first two months of this year, with February sales showing a 13 per cent year-on-year growth.

With the launch of the new M-Class sports utility vehicle(SUV) this month, the company aims to sell double the number of units sold last year, that is 82. While the car has been upgraded, there has been no price revisions. The petrol variant will cost Rs 53.77 lakh, ex-showroom in Kolkata and the diesel variant would cost around Rs54 lakh.

The company's new manufacturing plant at Chakan near Pune can manufacture around 5,000 passenger cars and 1,200 commercial vehicles per annum in single shift operations.