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Ahead of Mercedes A Class launch, BMW brings down prices of 2 series sedan with new variant

Sumant Banerji     March 24, 2021

Ahead of the launch of luxury car market leader Mercedes Benz's most affordable model A class on Thursday, arch rival BMW India has introduced a new Sports variant of its 2 series sedan at Rs 37.9 lakh.

The new variant is powered by a 2 litre twin turbocharged petrol engine that has a maximum output of 190 bhp and torque of 280 NM. Launched in October last year with only a diesel engine, the 2 series sedan was priced at Rs 39.3-41.4 lakh. In January this year, it launched the fully loaded petrol version--220i M Sport, at Rs 40.9 lakh. It also increased prices of the diesel versions by upto Rs 1.1 lakh. With the launch of the Sports version, it has lowered the threshold though it can also be seen as a stripped down version of the other petrol variant.

"An important pillar of BMW India's strategy is to offer the valuable 'Power of Choice' across its versatile model range that caters to the customer desires and mobility needs. The addition of the 'Sport' variant to the successful BMW 2 Series Gran Coupe model line-up, presents an excellent value proposition along with attractive features," said Vikram Pawah, President, BMW Group India. "With the growing popularity of petrol models in the premium segment, the new BMW 220i Sport is an irresistible choice for aspiring individuals to enter the world of BMW with style and performance."

With the launch of the A class on Thursday, Mercedes will be targeting the sub Rs 50 lakh price segment hoping the higher affordability will bring in more consumers to its fold. It is a strategy that like BMW, has also been adopted by the third German carmaker Audi. The Inglostadt based carmaker had also launched its entry level crossover Q2 in India in October last year at Rs 34.99 lakh.  It is a strategy similar to the one adopted by luxury car makers between 2012-14.

In 2012, Audi had launched the Q3, which was at that time the cheapest luxury car in the market at Rs 26.21 lakh and had followed it up with a stripped down corporate version -S at an even lower price of Rs 24.99 lakh. The car almost single handedly catapulted Audi to the leadership position in 2012-13. This had prompted Mercedes and BMW to launch their own affordable brands--GLA, CLA, A and B class for Mercedes, and 1 sedan and X1 for BMW.

A rerun of the same strategy comes at a time when the luxury car market has stagnated for over 5 years. In 2020, the segment contracted by nearly 40 percent as a result of the pandemic. It came on the back of an over 13 per cent decline in 2019, which at that time the steepest ever fall in a decade. In the pre pandemic era, tndustry sales have remained range-bound in the 35,000-40,000 unit per annum band since 2015 and is significantly lower than earlier projections of about 100,000 units by 2020. Luxury cars account for just 1 percent of overall industry in India as against 4-6 percent in other emerging markets.

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