In this edition of CNBC-TV18's The Forbes India Show,
Eberhard Kern, MD, Mercedes-Benz India says that the six months since
he assumed charge were full of challenges such as the slump in overall
auto sales and the depreciation in the rupee .
Also read: The luxury car battle: Audi's plans to stay on top
Eberhard
Kern adds that fall in the value of the rupee against dollar has
started to impact margins and highlights that a decision will be taken
to change revise pricing by July or August.
The growth of rivals
Audi and BMW do not disturb Kern who says that he remains focused on
establishing a sustainable and profitable business at Mercedes-Benz
India.
Below is the edited transcript of the show on CNBC-TV18
Q:
Your first six months in India has been a pretty eventful — auto sales
slumped to record lows, the rupee has sunk almost 9 percent in the last
two months and the finance Minister paid particular attention to the
luxury auto segment during the Budget. How are you faring?
A:
Yes, it was quite a challenging time since I arrived in December. The
past six months have not only been challenging, but fascinating as well.
The tax impact was not planned and the Budget this year took us by
surprise. Indian customers have to now pay more than 50 percent in
taxes.
Q: How badly has the fall of rupee hurt you?
A:
The euro is much more important to us than the dollar as we import most
of our products, kits or parts from the euro zone. In December 2012,
the euro was around 70 and we established a defensive strategy for the
year after taking into consideration a probable rise of the euro to rise
to 74 against the rupee. But now it is at 78-79.
This of course
directly impacts our costing which involves purchasing in the euro and
selling in the rupee. Our profit margins will start to face some
pressure. So far, we have been able sustain the price level, but if the
rupee continues to wobble over the next few weeks or months, we may
have to re-examine our pricing as well.
Q: How long will you wait before you take a decision?
A: We will have to come to a decision latest by July-August.
Q:
Your stint began when Mercedes-Benz in India lost its position at the
top to rivals Audi and BMW. Was restoring the company's position one of
your goals when you took over the helm in India?
A:
No, there was no such goal this. Our goal is to establish a business
that is sustainable and profitable and we have formulated our plans
accordingly. We face competition everywhere in the world and that
includes India as well. Yes, we are ambitious but we follow plans of our
own.
Q: Let us talk about those plans. Will you be able to beat the competition with the launch of the A-Class?
A:
We have been in this business for years. The E-Class, as you mentioned
correctly, is one of our most important models today. Of the over 2,000
cars we sold in the first quarter which was 5 percent better than last
year's Q1 sales, the sales of the E-Class contributed 40 percent. So it
is one of our most important models.
Overall, we are the leaders
in all the segments that we are present in. There are also segments in
the market that we were able to develop quite successfully in the last
one-to-two years such as the mid-sized luxury SUV and the small-sized
luxury SUV. As we do not have any products in those segments right now,
we are not able to participate in them.
Q: Why did that happen? Was it a lack of foresight or planned?
A:
There are different reasons for this. In the mid-sized luxury SUV
segment, we have the Mercedes-Benz GLK, but unfortunately the only model
on offer is the model with the left hand drive.
We hope this
will change with the successor model we plan to introduce in two year's
time. Though we do not have a product in the small-sized SUV segment
right now, you may recall that a few months ago at the Shanghai Motor
Show we exhibited the Concept GLA.
This model had a very, very
positive response in the Indian market as well. So I am quite confident
that we will be able to launch this model into India in one-and-a-half
year's time.
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==+_ANANDARIS YUNAN NUR FAKRI_+==
Jumat, 14 Maret 2014
Auto biz challenging; eye long-term profit: Mercedes-Benz
Posted by Unknown on 21.05
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