India to be DaimlerChrysler's outsourcing base
Wednesday, 27 November 2002, 08:00 Hrs
NEW DELHI: German auto major DaimlerChrysler plans to use India as a software outsourcing base till the market matures to buy its luxury models, say company sources. DaimlerChrysler, which has 12 dealers to take care of its after-sales support services in India, will add 10 more outlets in this country. These outlets will be investments made by its existing dealers, said company officials. "We will improve our dealer network," Sanjiv Sahajwala, head of sales and marketing of DaimlerChrysler, makers of Mercedes-Benz, told IANS. "Only four percent of India's car segment goes for high-end luxury cars like Mercedes. The company has a plant in Pune, Maharashtra. "Although we are making operating profits here, we perceive that the market will mature in five years. Till then we will use India as our outsourcing base for software and other automotive components. "The Indian market is yet to mature, and at present there is 35 percent space for new entrants in the mid-sized luxury car segment. "Our job is not to impose luxury cars, but to give a better choice to buyers who already have a car worth $1 million and are looking at something beyond $1.5 million range." DaimlerChrysler India makes a series of Mercedes in India including the S-class, E-class and C-class series. It also sells M-class, C-class SLK and CLK-Cabrio series Mercedes by importing completely built units. "We are looking at owners of Honda City and Mitsubishi Lancers, who have the capability to switch over to a Mercedes after 3-4 years when they look for an upgraded version in the luxury segment," Sahajwala added. DaimlerChrysler India has doubled its profits from 2001 to 2002 to around 410 million, with a turnover of 3.45 billion. The company has so far sold 1,500 models of Mercedes in India, he said. It has already booked orders for around 100 units through completely built unit (CBU) imports, with the M-class Mercedes being most in demand. Sahajwala disclosed that DaimlerChrysler plans to bring all the models under its brand to the Indian market through the CBU route. At present, the SLK, CLK variants and the M-class model of Mercedes-Benz are brought through the CBU route. Mercedes-Benz made its entry into the Indian market in collaboration with Telco in 1995. DaimlerChrysler India, earlier known as Mercedes-Benz India, changed its name in November last year. It is now a 100 percent subsidiary of DaimlerChrysler AG after the German major bought out Telco's 24 percent stake in a joint venture worth 840 million.