Mercedes looks at sub-Rs 20 lakh model, may start with A-Class

German auto major Mercedes Benz on Thursday said it will look at introducing models, including the A-Class, priced below Rs 20 lakh in its bid to regain number one spot in the Indian luxury car market.

The company, which will complete launching of products aimed to drive volumes in India by 2015-16, expects 40 per cent of its entire product range to be priced below Rs 25 lakh in the next 5- 10 years. It is investing Rs 250 crore on new product line up till 2014.

"Yes, we are thinking in this direction," Mercedes-Benz India Managing Director and CEO Peter Honegg told reporters here when asked if the company would introduce a model below Rs 20 lakh category to gain volume.

"I will not eliminate the case that we will have a car below Rs 20 lakh," he added.

He said the upcoming model A-Class in next year could be priced in this range. The company will also introduce a sports utility vehicle based on the A-Class platform.

Asked if Mercedes-Benz will source smaller engines from French car giant Renault, with which the German firm's parent Daimler has a global association, for the Indian market, Honegg said the company may consider it in future although no decision has been taken yet.

Talking about its product plan, he said: "In the next 5-10 years, 40 per cent of our new models will be below priced Rs 25 lakh... The premium segment, which is in the range of Rs 20 lakh to Rs 30 lakh, is witnessing good growth in India, while the luxury segment above that is flat."

Mercedes-Benz India had lost its leadership position to compatriot BMW in 2009. This year, it is likely to slip to the third position, giving way to Audi India, which is expecting to sell over 8,000 units.

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