The battle between automotive luxury brands Mercedes-Benz and BMW is being played out in India on three fronts

products, distribution and events.

By attaining the leadership position in a country in just its third year of operations, BMW India created history within the group worldwide. In 2009, BMW sold 3,619 units, while Mercedes-Benz India managed 3,247 units. BMW overtook Mercedes for the first time when the January 2009 sales were revealed. It was a rude shock for Mercedes-Benz.

Strategies of Mercedes Benz

The action began at the Auto Expo in January, where a collective intake of breath accompanied the rise of the gull wing doors of the SLS AMG supercar easily, the star of the show. Internally, Mercedes-Benz called it the 12x12 strategy. To garner more volumes, they have introduced stripped-down versions of their big sellers

Strategies of BMW BMW introduced the limited edition Gran Turismo, the extremely powerful X6 M SUV. A host of other variant Series. To garner more volumes, they have introduced stripped-down versions of their big sellers

Despite sharply divergent financial situations, BMW and Mercedes are more similar than they are different. Both brands command astonishing customer loyalty, have produced performance models that define automotive essence for gearheads around the world, and are bastions of luxury. Indeed, studies show that, despite the advance of Lexus, Jaguar, Infiniti, and others, the ultra rich still see Mercedes and BMW as the most prestigious brands on earth.

STRENGTHS Diverse ranges of Products Strong Cash Flow Position Increase turnover and trading profits Strong Balance Sheet World's leading Premium Quality Automobile Manufacturer Brand Awareness Human resources Capabilities to turn resources into advantages WEAKNESSES Perception of High Prices Customer disinterest Environmental issues: Pollutions Buyer sophistication and knowledge Substitute products or technologies

OPPORTUNITIES

New Products Market shift to globalisation Innovation & Alliances Customers demand change to more comfortable and relevantly cheap cars Diversification New Technologies in Automobiles

THREATS

New & existing competition Volatility in Price of Fuel New legislations Consequences of the oil crisis Economic recession Market shift to globalisation Takeover bids Far-East Automobile companies expansion Extremely high competition for customers and resources

We assure you that the rest of 2010 will also be highly engaging and we do have a few more surprises in store for our customers," says Wilfried Aulbur, the MD & CEO of Mercedes-Benz India. His few more surprises could be the category busting R-Class, the cabriolet version of the stylish E Coupe and new products powered by the recently introduced CGI technology.

BMW too promises not to relax. In 2010, we will resolutely expand our product range and thus cover all the opportunities in the luxury segment which are relevant for us," promises Dr Andreas Schaaf, the new president of BMW India.

Car manufacturers always use new product launches to drum up excitement and keep the tempo up in the marketplace. When it comes to luxury cars, new engine technologies plus safety and comfort features also play a big role. But in this case, both the luxury car makers realize they need to do more than mere product launches - after all, they are selling a lifestyle and not just automobiles.

Both manufacturers have inevitably associated themselves with golf, high fashion and varied touch-andfeel experiences with the brand for customers.

Beyond the association of the brands in high profile activities, both the German manufacturers realize the game is going to be played out at the retail level.

With an investment of over Rs200 crore in network, Mercedes-Benz is now present in 26 cities with 55 touch points, the largest for any luxury player in India. In fact, the manufacturer has weeded out underperforming dealers, leading to a 30 per cent churn in their 2009 line-up.

BMW, being the newer player and with only 17 dealer facilities. It is racing against time to establish its presence in more cities. An aggressive plan was implemented for completion of phase 1 (12 dealers in the major metros) much ahead of schedule. Owing to an exuberant growth potential, they will expand operations in 10 additional cities in phase 2 of their dealer network strategy.

In January-April 2010, BMW sold 1,621units while Mercedes-Benz's revival has translated into 1,603 units. The race is pretty close and there are still eight long excruciating months to go, during which the action can get quite intense. Better strap up.