German car maker Mercedes Benz India will soon start leasing its cars in India to attract entry-level luxury car buyers and start its used-car business.
By nature, Indians prefer to own cars than to lease. Currently, no other luxury car manufacturer offers leasing facility directly to consumers, said Mr Peter Honegg, Managing Director and CEO of the company.
The leasing of vehicles works like this. A dealer purchases cars from the company and leases them to individuals for a particular period. The dealer can also purchase second-hand cars from the market, refurbish them and lease them to customers.
At the end of the period, the dealer takes back the vehicles. The business plan and market potential are being worked out, he told newspersons at the launch of the company's dealership – Transcar India Pvt Ltd – in Chennai.
The company hopes to attract people who want to buy cars that are priced below Rs 20 lakh.
Mr Honegg said leasing of cars would start in Delhi, Mumbai, Pune and Kolkata but did not say when.
The company aims to sell over 7,000 cars this year compared with 5,600 last year. It also plans to introduce diesel variants on some of its existing models. Nearly 40 per cent of Mercedes Benz cars sold in India is diesel variant, he said.
Mr Honegg said the premium luxury car market in India is 20,000 to 25,000 cars per month. This is expected to reach 300,000 cars in the next 10 years.