Wednesday, March 06, 2013

Fast developing luxury automobile segment in India

In an Exclusive Interview with Sanchit Verma, Dr. Wilfried Aulbur, the outgoing MD and CEO of Mercedes-Benz India reveals his insights into the Indian luxury Auto segment, making Mercedez the No. 1 luxury auto brand in India and the general dynamics of the fast developing luxury automobile segment in India

B&E: What role does India play in Mercedes- Benz’s global strategy?
WA: Currently we are not even 1%, but if we look at the future, we will definitely grow in size over the next ten years or so. But at the end of day, the market share we are talking about is in very small volumes; we are talking about a difference of just a few hundred cars. So, what is more important for us is the brand leadership, value for money for our customers, and definitely profitable growth. It’s not that we don’t care about volume, but volume and profits has to go hand in hand.

B&E: You have spearheaded the company’s growth in India for around 5 years. What were the challenges you came across during these years?
WA: In these 5 years we had several challenges to address. We surely witnessed the transition from monopolistic environment into an environment of intense competition, where we not only have the German players, but also the Jaguars and other global players. At the same time, we have also seen the market growing dramatically, providing great opportunities to us. That’s the reason, for which we are set to end the current fiscal with sale of 5,000 units and also to grow at a CAGR of about 30% over the next 5 years.

B&E: You just mentioned that Indian luxury car segment have now become a lot more competitive. Keeping that in mind, how are you planning to beat the heat of competition?
WA: What I have always focused on is value for money. We have not gone into overtly aggressive discounting because at the end of the day we believe that the luxury car customers wants an experience and is willing to pay the money for that value. At present, we have a very good bottom line and as we go forward we are going to continue along these lines.

B&E: You started the truck business right from scratch in India. How tough or easy was it for you?
WA: Yes, we entered the truck business from scratch wherein we established ourselves very successfully and maintained our philosophy of giving the best to our customers. We launched products, which were best in performance while we also ensured that our overall business system made sense. Business at the end of the day is a volume game, which in return gives you operating profit. In the truck business, we turned cash flow positive in our second year of our operations itself.

B&E: So, is this the end of your association with Mercedes-Benz?
WA: Of course not. I am not going to go away from Mercedes-Benz India. Along with my team, I have been a part of tremendous development for the company over the last five years and we are sure that we will see similar development in the next five years as well. But, at this juncture of life, this opportunity was very interesting for me. That is why I have decided to part my way. It’s purely a professional decision that happens in one’s life sooner or later.

B&E: What are the developments that you see today as compared to the time when you came to India?
WA:  Luckily, I have had the privilege of watching India over the last 16 years and this is a very important part of my decision to continue in India. If you look at the same and my assessment, I am extremely excited to see myself for the next 15 years in India too.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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