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Mercedes-Benz Financial, the vehicle financing arm of German luxury carmaker Daimler, is expanding its business on the growing popularity of its parent’s luxury car business in India. Mercedes emerged as the country’s biggest luxury car player in 2015 and retained the position in the 2016 calendar year.
Every second vehicle sold by Mercedes in the country (on lease/finance) is now financed by Mercedes-Benz Financial or MBF. The carmaker said MBF saw a growth of 25 per cent in its transactions during 2016. “MBF is growing favourably with our rising presence. They started just five years ago and have grown rapidly. They have introduced new concepts in financing and offer a high degree of flexibility to buyers. It has helped us in regaining more customers. The company can make money on sale of vehicles and also on financing them,” said Roland Folger, managing director and chief executive officer at Mercedes-Benz.
In 2015, Mercedes posted a 32 per cent growth in volumes and sold a record 13,502 vehicles in India to become the largest player overtaking German brand Audi.
The company’s volume declined marginally to 13,231 vehicles in 2016 due to the diesel ban in the national capital region and demonetisation, but it remained the largest player. MBF does not finance vehicles from the competition.
The financial services business of Daimler is also growing on the back of its commercial vehicle business in the country under the Bharat Benz brand. Bharat Benz does not share the volumes it sells but Bharat Benz Financial finances every second commercial vehicle (CV) sold by the company.
Other than financing vehicles at competitive rates to banks, Daimler also offers insurance service for these vehicles, bringing another income stream for its parent. The company said every two out of three luxury vehicles sold was protected with Mercedes-Benz Insurance. In case of CVs, two out of every five units sold were protected with an in-house insurance product.
Daimler Financial Services India (DFSI) has played a key role in the growth of both passenger and CV business of Daimler in India and it aims to be the first-choice provider of financial and mobility services for customers and dealers, the company said. It added that DFSI has executed more than 30,000 loan contracts in a period of just five years. Daimler Financial Services’ global portfolio volume is more than 125 billion euros as of November 2016.
