Klaus Entenmann, Chairman of the $4-billion Daimler Financial Services AG - the captive financing arm of the Daimler Group - was in India recently to launch the services of its local unit. He took time off his hectic schedule to speak to BT
's N. Madhavan on the timing of the German firm's entry in the country, the attractiveness of the Indian market, his firm's long-term prospects and the virtues of leasing as a way of financing a car purchase. Edited excerpts from the interview:
On entry into India:
We are entering India at the right time. We had our label programmes going when the sales volumes of Mercedes
were around 3,000-4,000 per year. Now we sell over 5,000 units a year, and this gives us an opportunity to create a business volume that is big enough. Also, considering the fact that we will roll out our trucks next year, we have now decided to establish and maintain our own company.
On the Indian market:
India is not an easy market to enter. It is very competitive. But the good thing is that the country's banking and legal systems are good. There is a lot of certainty that you can build on.
On long-term plans:
While the auto sector shows early signs of slowing down, we see our foray as a long-term investment. Demand for luxury cars will rise. The truck market also has huge potential, as the delivery of goods for all the infrastructure work in the country will have to be done by trucks.On leasing:
While India is as evolved as any developed market when it comes to financing a vehicle purchase, leasing for some reason is not seen as a preferred way of financing a car purchase. People still believe in owning the cars. In 2009, about 40,000 cars were leased and it may rise to 100,000 by 2013. Through leasing solutions, we want to make Mercedes cars a lot more affordable. That should see a sharp rise in volumes.READ
: Mercedes-Benz goes online in India