Interview with Debashis mitra

Mercedes-Benz India CEO Dr Wilfried Aulbur recently  remarked that his company is not really in the number game but “we have the ambition to lead”. Now is it not a number game eventually?

Not really. We do not want to fight the number game. If numbers mean leadership we are not in the game. We are very open and blunt about it that we are not looking at the number game. At the end of the day, we are doing business for profits. We are working for our investors and it hardly matters whether we sell five cars more or five cars less than our nearest competitor, but it definitely matters if we make more money or less money. In a high technology company there is a huge amount of money that is spent on research and development so as to better our technologies. So if your profits are low, then you cannot re-used the money for such purposes. Globally if we see we have 8.6 per cent returns as compared to around 5.5 to 6 per cent achieved by our nearest competitor that means we are making far more money. Our returns are the highest in the world. That is our focus and will remain our focus as far as our business philosophy is concerned.

At the same time customer satisfaction will remain our focus too and numbers will not matter. In the process if numbers happen, then it will be well and good. But in the process if the numbers come down then it is not the biggest challenge for us. Unlike in a volume car industry, in a luxury car industry it is the products and the variety that matters, not five cars more or five cars less.

And coming to the leadership part which Dr Aulbur talked about, primarily we are talking about perception leadership where Mercedes Benz should be looked upon as a leading brand not in numbers but in technology. Today we are talking about 17 to 18 products that is variety of products which is an outcome of technology. Numbers is also function of  de-contenting the car and selling it a lower price, and this is not an area we want to focus on because we are serving a different segment completely. 

Is there a delay in Daimler setting up a financial services arm in India?

There is no delay. The biggest decision here is the internal approvals for bring in the DFS because it is a 100 per cent Daimler company so there will be equity investment. The internal equity approval at the global level has now been cleared. The decision to invest and come into India is already through and the formal approvals from the regulatory bodies are in process.  We should be up and running in some time. We may not start will the entire gamut of services offered globally but initially we may do that gradually. We will launch the primarily products like retail funding, insurance, leasing etc.

 Will it only be financing Daimler products?

It is a Daimler company. It cannot finance other company products. It will be financing Mercedes car business products from Pune and the Daimler truck business products from Chennai. By 2011 we hope to set up the finance company in India. 

What is the real purpose of these ‘Mercedes Star Fascination’ events that your company is organising at dealer ends? Is it all fun and games?

At the end of the day our way of selling is such that we do not give discounts. We also do not sell de-contented products. We say that we fundamentally believe in product range and variety. At the end of the day we are targeting customers who have surplus money but do not have time to come to see our products in our showrooms. We are trying to create a reason for the customers to come to our showrooms. Star Fascination fest is one of the reasons to do that. We are doing 30 events in the country in a span of two months only in showrooms while one event is focussed on fashion for which we have tied up with Manish Arora fashion designer. We will also be retailing in our showrooms a lot of fashion accessories designed by Manish and inspired by Mercedes Benz.  Why fashion show? Mercedes Benz is a great fashion player globally. With a such accessories, there is one more good reason to come to our showrooms, other than buying a car. While the men can buy their cars, the ladies can pick up anything from a scarf to a bag. Of the 30 events I mentioned, 15 are fashion related and 15 are drive related. We have got Gran Tourismo which are basically SLS AMG play stations These have been especially imported from Sony. These are simulators wherein you can feel the drive.  

Your R-class is a vehicle targeted at the luxury MPV segment that has hitherto not been really exploited in India? Is there a huge potential there?

I will not say there is a huge potential but yes, it is a potential to be evolved and seen.  If you see cars like the Innova, they have been a huge success. That is the normal sedan segment of Rs 12 lakh to Rs 14 lakh. The R Class is a big car and traditionally people love driving a big car especially when it comes to travelling as a big family. But again, some people like a big car but that has an SUV image.  It is how you want to be perceived as. Some like the aggressive outlook and want to go for an SUV that gives an aggressive look.  But if someone wants a 7-seater that looks like a car and yet offers more than a car, then he can go for a R-Class.  If you also look at the luxury hotels that ferry people to and fro to the airports, they too look for a spacious car. The R-class is the right answer. 

When do we see the likes of the A-class and B-class coming to India?

Globally these products are going through a complete change. But we also have to see whether the Indian car market is mature enough to accept a hatchback at a particular price point. Thus it is not a question of whether we can bring such a car or not into India but whether the Indian consumer can accept it. We are very serious about it, we are studying it but we have not yet come to any decision on it. But it does not mean it will not happen and it also does not mean it will happen tomorrow morning.