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Now Mercedes to enter pre-owned car business in India: Will it work for them?

Created by : Mridula Maity, Product Development Manager, Rugel  | 06 30 2010 06:26:42 +0000
Industry : AutomobileFunctional Area : Business Models(Strategy & Execution)
Keywords : bmw mercedes pre owned cars pre owned cars business bmw leased cars second hand cars mercedes pre owned cars
Activity:  736 views;  last activity : 12 06 2010 14:46:32 +0000

Luxury car-maker Mercedes Benz India today announced its foray into the pre-owned car business in the country, which will bring down the cost of owning a vehicle from its stable to as low as Rs 15 lakh.

The company is also gearing up to enter the car finance business as it looks to push sales in India amid increasing competition from rival BMW which introduced earlier of leasing its cars.

             http://www.esigns.com/stock%20pics/pre-owned-BLUE.jpg
      http://www.thetorquereport.com/2009_mercedes_benz_sl_amg.jpg

Mercedes Benz started its pre-owned cars programme, Proven Exclusivity, in 2009 globally and is operating across 35 countries.  But here don't you think there will be some sort of brand dilution of Mercedes with a second hand car being sold to customers, They might increase their sales but Mercedes is known for its new set of cars and luxury, will these second hand cars impact the image of Mercedes in India? is what needs to be known.

So, what do you think people will this move work for Mercedes interms of Pre-owned car business?

  
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I think it might work for them, even BMW came  up with something similar, where they could lease their cars in India earlier this year...also they were giving a stiff competition to Mercedes interms of sales lately as many are preferring BMW lately. With such evident threat to Mercedes they needed to comeup with something like this, its not like they are doing this for the first time they have this business format in more than 35 countries and its something that is not new for them, but in India, people consider Mercedes cars a true sense of royalty and luxury because that is the Image that they are having. And with second hand cars it might impact somewhat, but surely will up the sales and number of cars sold from Mercedes in India and will give BMW a stiff competition.
By Mridula Maity, Product Development Manager, Rugel  06 30 2010 06:26:42 +0000
 
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Yes, definitely.
By SHRIKANT MANOHAR DANKE, Project Manager, Phadnis Infrastructur Ltd  | 12 06 2010 14:46:32 +0000
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I think things may not work for Mercedes in long run(in INDIA).Mercedes may run the Second hand show(in loss)...But they are doing it to increase New car sales.Not every customer would like to take a second hand Mercedes directly from a dealership because it would involve costs of refurbishing ,VAT & Profitability to the company.And more over the the rate of interest for a pre-owned is almost equal to a new car.So selling a old Mercedes in a sensible market like INDIA becomes tough.Only advantage is they can push their new cars to old customers on exchange basis(where they will split the actual value of the car into car's resale value+Loyalty bonus ,the way Maruti does).This move of Mercedes is Basically to have good Resale value for their cars(as depreciation is too high for Luxury cars) and to push new car sales due to cut throat competition from BMW & AUDI.
By P.Aftab Ahamed, Engineer, KPIT Cummins Infosystems Ltd  | 07 04 2010 19:55:06 +0000
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