Clash of Tuetons
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Transcript of Clash of Tuetons
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The battle between automotive luxury brandsMercedes-Benz and BMW is being played out
in India on three fronts
products,distribution and events.
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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.
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Strategies of MercedesBenz
The action began at theAuto Expo in January,where a collective intake of
breath accompanied therise of the gull wing doors ofthe SLS AMG supercar -easily, the star of the show.
Internally, Mercedes-Benzcalled it the 12x12 strategy.
To garner more volumes,they have introducedstripped-down versions oftheir big sellers
Strategies of BMW
BMW introduced the
limited edition Gran
Turismo, the extremelypowerful X6 M SUV.
A host of other variant
Series.
To garner more volumes,they have introduced
stripped-down versions of
their big sellers
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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 onearth.
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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
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OPPORTUNITIES New Products
Market shift to globalisation
Innovation & Alliances
Customers demand change to more comfortable and relevantly cheap cars
Diversification
New Technologies in AutomobilesTHREATS 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
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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 & CEOof 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 CGItechnology.
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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 arerelevant for us," promises Dr Andreas Schaaf, the new
president of BMW India.
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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.
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Both manufacturers have inevitably associated
themselves with golf, high fashion and varied touch-and-
feel experiences with the brand for customers.
Beyond the association of the brands in high profileactivities, both the German manufacturers realize the
game is going to be played out at the retail level.
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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.
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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.
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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.
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