Search the Internet          Tips  Sites: Finance, Investment

Perceived value will decide fate of Merc's C Class

NetScribes / Mahesh Shetty

Analysts believe the success of MBIL's (Mercedes Benz India) newly launched C Class will depend a lot on the perceived value of the brand. The question buyers will ask - is the three-point star worth the hefty premium above the lower end of the super luxury range.

At Rs 2.1 million, the baby Merc is still a good Rs 500,000-700,000 away from the announced prices for the lower positioned but almost as attractive Honda Accord or new entrant Hyundai Sonata. Both these cars are expected to be launched in the Rs 1.4-1.6 million range. "Ultimately it's the buyer's value perception - is the badge (Mercedes) worth the extra half a million bucks - that will decide any shifts happening in this segment," said a senior sales manager at a leading South-based auto MNC.

Although the luxury segment is not set for any high-octane growth over the next couple of years at least, the battle, as with any other segment will still be hard fought.

Analysts are more bullish on Honda's price line. This level is where they believe most buyers will move from the Mitsubishi Lancer and the Honda City (Rs 0.8-1 million). "Chances of buyers going from Rs 0.8-1 million to Rs 1.5 million are a lot brighter than of them going from Rs 0.8-1 million to 2 million," said an analyst at a leading foreign bank in Bombay. For the lower priced C Class, targeted at a young, cost conscious buyer, a large part of the market will have to be weaned away from the existing buyers in the Lancer / City range.

The industry opinion is that the C Class's price tag is MBIL's own valuation of what its brand can do for this product. The C180 is the petrol version while the C200 is the diesel option. The car is assembled at the same Pune plant that brings out the E and S class models.

Money

Business News

Tell us what you think of this report