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.

Volkswagen Caddy – the New Commercial Car from Volkswagen

“India deserves a good taxi,” said Stefan Schaller, board spokesman for VW’s commercial vehicles business.

Volkswagen is planning to launch a new car in India, the Volkswagen Caddy as a low cost taxi for urban use. The commercial arm of Volkswagen may soon launch its new model, the VW Caddy, in India via a joint venture with an Indian partner.



The new Caddy will be a viable alternative to Tata Indigo and Tata Indica currently being used by Indian taxi operators. This would mark entry of the company in the Rs 43,000 crore commercial vehicle market in India. The existing model of VW caddy does not have any windows at the back – the windows are only in the front, but this mainly due to taxation rules in Europe. The existing model of the VW Caddy in the UK may not be feasible in India and the Indian version may come with a few modifications. Volkswagen has already announced that it plans to expand its network and product portfolio in India to occupy a larger market share. It had also announced that it will enter the commercial vehicle market in India as well.

VW Caddy has a seating capacity of seven passengers and is like a delivery van and a compact van rolled into one. Volkswagen has not announced its prices or other details but the car is expected to be priced around Rs.8-9 lakh in India.

Eicher, AB Volvo venture finalised

Eicher Motors Ltd and AB Volvo (Volvo) finalised their joint venture deal with the closing of definite agreements that were signed between the two on May 26.

EML has transferred its commercial vehicles business along with its related components and engineering design services businesses to its joint venture company with Volvo, VE Commercial vehicles Ltd. (VECV). In addition to the businesses being transferred from EML, this venture will also contain Volvo Group’s Indian truck sales operations and the truck and bus service operations. The operations of VECV are effective from July 1, 2008.