The work life of
Eberhard Kern, just weeks into his new role as the India CEO of Mercedes-Benz, is about to change quite dramatically. Kern, 49, who was till November heading the more mature Taiwanese operations where Mercedes was the market leader, suddenly finds himself in a more challenging landscape considering that the Stuttgart-based auto major has slipped behind its two German peers —
BMW and
Audi — in India.
Kern expects that to change, and this year the 127-year-old Mercedes-Benz is taking the battle to the competition with a new offensive as it tries to reclaim that pole position in a burgeoning luxury car market. Kern emphasizes that things would be quite different in 2013, as we sit down to chat with him at a spanking new Central Mumbai hotel in his very first interaction after taking over in December 2012.
"This year will be the year of the offensive for Mercedes-Benz in India," he says. The game plan for the three-pointed star logo revolves around a four-pronged strategy of enhancing products, brand engagement, quality and ownership experience. Mercedes, which bolstered its presence in the upper end of the premium market with the launch of the cheaper B Class last month, plans to expand its dealer network, reduce the cost of ownership and build an experience around the brand which is younger and more stylish.
For starters,
Daimler AG's Mercedes-Benz, which has been in India for almost 20 years, will finally get aggressive about what it calls the "premium" end of the Indian luxury car market. And that's where the action is. This segment, with an attractive pricing of Rs 25 lakh or less, is largely where it has been hit by BMW's X1 and X3 and Audi's Q5 and Q3 models. Kern positions these models from the competition under the premium category and feels that it is still a leader in the luxury category, which incidentally is an insignificant fraction of the total auto market. "The reason they have moved ahead is because they have products in this category," the soft-spoken German says, explaining the brand's drop to the third spot over the last couple of years.
The market dynamics are primed to change in the first six months of 2013 with the launch of the A Class in petrol and diesel and the compact B Class in a diesel version, which are directly targeted at addressing the entry-level luxury segment. "We will also see the launch of the Mercedes-Benz GL-Class, a full-size luxury crossover SUV to add to the product offensive." Besides, there will be more models in the latter half of the year, he says without revealing pricing or category. Globally, it's expected to launch around 15 models over the next couple of years.
Kern was just 19 when he started work at Mercedes-Benz straight after school. In his career spanning 30 years, he has also had global stints in Russia and then in Taiwan, both of which have grown dramatically for Mercedes. But he acknowledges India (part of its top five markets in Asia) is a completely different market.
He says all the strategies lined up for the Indian market are in keeping with the brand's vision 2020 of being the number one luxury carmaker globally. Having opened last week a 60,000-sqft showroom in Delhi —it's largest in the country costing Rs 70 crore — the brand will look to further its touch points and invest Rs 480 crore in the local market till 2014. "There is an India in every Mercedes," he says, describing the 1,000-people strong R&D centre in Bangalore, its largest outside Germany.
"Our customers should rely on the total experience of owning a Mercedes-Benz. The endeavour is to reach out to newer and younger consumers. Traditionally, the brand value has been about reliability and class. So the reinvention of the brand is aimed at tapping women, self-drivers and young professionals who are entering the automotive market. "We have been seen as a largely male brand but the stress on style, design and sportiness should help us cater to these new segments."
To enhance experience, Mercedes-Benz will also launch for the first time an off-roading track at its Pune plant along with a young drivers' professional programme for budding Formula One drivers, similar to the experience Mercedes AMG offers on the Buddha circuit in NCR. But Kern says this is not the first time the brand finds itself in the throes of change. "Mercedes-Benz has always been about innovation. For instance in 1982, the year I joined, we launched the Mercedes-Benz 190 what was also called Baby Benz. This was the predecessor to the C-Class. It was like opening up the brand to new segments since we never had a compact offering till then. The same happened when we launched the SLK in 1990s, a compact roadster which was copied by many others," he says.
The German luxury brand hopes that this time too opening up to new segments will only help it keep its innovation stream alive as it aims to lure a new segment of consumers.
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