BMW zips past Mercedes in India's luxury car market

For the first time ever, luxury marque Bayerische Motoren Werke AG, better known as BMW, has overtaken arch rival Mercedes Benz in terms of sales in India, taking the fight for supremacy in the luxury car segment to a new level.

BMW sold 270 cars and sports utility vehicles (SUV) or three times the total number of cars sold by Mercedes Benz, which stood at 89 units in January. Officials from both the companies say that 2009 will be the year, which would clearly define whether the generational domination of the three pointed star will be lost to BMW.

While announcing the launch of the X6 model (a luxury SUV) Peter Kronschnabl, president, BMW India said, "We were able to take the lead in January thanks to the success of the 3 and 5-Series. Around April we will get a clearer picture of market demand and will be in a better position to predict on following months."

Although sales in 2008 at 2,908 units was the best for BMW so far in India, it was still 24.5 per cent short of Mercedes tally of 3,621 units.

However, in the current financial year BMW has sold 994 units of the 5 and 6 Series sedans as compared to 490 units sold during the same period the previous year. Both models are in the range of Rs 40 lakh to Rs 85.5 lakh.

Meanwhile, Mercedes saw a rise of only 9 per cent in sales of the E Class at 883 units as against 810 units in the same period.

"Our customers are not that different from our competitors but the key to our success lies in the fact that we have been able to create the environment at our dealerships, service points, buying experience, which is on par with our global standards. Most of our 3-Series customers are young professional", added Kronschnabl.

The company launched three models in one month (January) including the new 7-Series, new 3-Series and the diesel variant of X3. The new luxury SUV X6, launched today is priced at Rs 65.9 lakh for the diesel variant and Rs 82.9 lakh for the petrol model.

According to industry experts the market for luxury cars expanded at a much faster rate than anticipated in 2008, however due to the on-going economic crisis the growth will be subdued this year.

Despite this luxury car makers are confident that the market will grow to 9,500 units by the end of next year from 7,500 units sold last year.

Sales for BMW began to show an upsurge ever since the company started local assembly of the 3-Series and 5-Series sedan in the Chennai plant from March 2007, thus making it substantially cheaper than their imported counterparts.

Mercedes Benz, meanwhile has decided to postpone the launch of the all-new E Class due to some technical glitches. Sources say that the launch is hampered due a delay in converting the model into a right-hand drive vehicle for markets like India.

BMW however, will go ahead with one more launch, which company officials say will not be a sedan, perhaps by the middle of this year.

Both companies have made special arrangements for financing their cars through tie-ups with banks and also through in-house financing arms. Although BMW has withdrawn the zero per cent interest rate offer, officials say that the company is working on different concepts along with the dealers.