Mercedes-Benz to Boost Presence in India’s Growing Tier-2 Cities

Mercedes-Benz, the renowned German luxury automaker, is set to broaden its presence in India, especially in tier-2 cities, in response to the increasing demand in these growing markets. The company has announced its intention to open ten new service centers in 2024, prioritizing the improvement of its after-sales network before focusing on expanding its sales operations.

Santosh Iyer, the Managing Director and CEO of Mercedes-Benz India, highlighted the importance of these smaller markets in a recent interview with The Hindu Businessline. He pointed out that some of these mini-markets are growing faster than in previous years. For example, cities like Raipur and Nashik are expected to show significant growth. However, Iyer made it clear that when it comes to total numbers, major metro cities like Mumbai and Delhi, along with their surrounding areas, remain the biggest contributors to the company’s growth.

Mercedes-Benz’s expansion plan for emerging markets prioritizes establishing service infrastructure before ramping up sales efforts. According to Iyer, the company aims to deepen its presence in mini-markets, believing that increased accessibility will naturally draw more customers. The primary focus in these regions will be on developing service capabilities rather than aggressive sales tactics. To support this strategy, the company intends to launch 10 new service facilities in mini-metros and smaller urban centers by the close of 2024.

In addition to enhancing its service network, Mercedes-Benz is looking into producing some accessories locally to better meet the needs and preferences of Indian consumers. The company is also planning a major upgrade to its retail experience. This year, 25 of its existing retail outlets will be transformed into luxury boutiques that offer an improved customer experience.

Iyer elaborated on this retail strategy by saying, “We have moved away from larger showroom formats to smaller, customer experience-focused formats. These new showrooms will feature design studios, private consultations for our top-end vehicle customers, and customization options for vehicles.” These boutiques are designed to offer a more personalized and luxurious shopping experience for Mercedes-Benz customers.

The company is also working on improving its after-sales service to enhance customer satisfaction. Previously, Mercedes-Benz offered a premium service where routine maintenance could be completed in just three hours. A step forward is now being taken by the company. Iyer explained that if automobiles under contract are delayed in the factory for other than three days, clients will be handed over with a courtesy automobile during this period. This policy shows Mercedes-Benz’s commitment to minimizing any inconvenience for its customers.

When it comes to new products, Mercedes-Benz is continuing to introduce new models to the Indian market. Recently the company launched the Mercedes-AMG GLC 43 4MATIC Coupé and the CLE 300 Cabriolet AMG. Mercedes-Benz is set to expand its luxury electric vehicle lineup in India with the launch of its first electric Maybach, the EQS 680 SUV, scheduled for September. This launch will further expand the company’s electric vehicle lineup in the country, aligning with the global trend toward electrification in the automotive industry.

Mercedes-Benz’s expansion plans in India reflect the growing importance of the Indian market in the company’s global strategy. By focusing on tier-2 cities and improving both its sales and service networks, Mercedes-Benz aims to take advantage of the increasing demand for luxury vehicles in these emerging markets. The company’s approach of establishing service centers before sales outlets in these areas shows a long-term commitment to customer satisfaction and brand building.

Additionally, the shift towards smaller, more experience-focused retail formats and the localization of accessories demonstrate Mercedes-Benz’s efforts to tailor its offerings to the Indian market. These initiatives, combined with the introduction of new models and the expansion of its electric vehicle lineup, position Mercedes-Benz to strengthen its presence in India’s luxury car market.

As the company continues to navigate the changing landscape of the Indian automotive industry, its focus on customer experience, service quality, and market expansion is likely to play a key role in maintaining its position as a leading luxury car brand in the country. The success of these initiatives could set an example for other luxury automakers looking to expand their presence in India’s tier-2 cities and beyond

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