Mercedes-Benz mulls vehicle finance arm

Mercedes Benz is considering launching a vehicle finance arm in India to boost sales of its passenger cars and commercial vehicles in a slowing economy, the head of the Indian unit of the German car-maker said on Friday.

Sales have fallen in the last two months because of tight liquidity, CEO and MD Wilfried Aulbur said, but added that he sees the slowdown as only a temporary phenomenon.

“The financial crisis is finite and the markets will bounce back. We are committed to our investments in the country because we have gone through a similar period in the past. At this point, we are still evaluating the option of launching our vehicle finance services,” Mr Aulbur said.

Mercedes Benz in India has already surpassed its sales target for cars and commercial vehicles this year because of robust demand up to September, he said, but did not reveal what the targets were.

The company has sold about 220 trucks and about 3,280 cars this year. “We are seeing a significant downturn in sales beginning October. The primary reason, we think, is the
unavailability of sufficient finance to purchase vehicles,” Mr Aulbur observed.

Daimler Financial Services, the in-house financial services arm, provides vehicle-finance, leasing, insurance concepts and fleet-management services valued at 58 billion Euros in 40 countries. Mercedes Benz, he said, is keen to launch new products in India, including city-buses and 3-axle buses. It recently entered the luxury bus segment with an intercity coach priced at about Rs 80 lakh.