BBA – MBA Integrated Programme

(2017 – 22)
Summer Internship 2020

MERCEDES-BENZ AG

Final Internship Report

(phase-2 & 3)
Submitted on
1ST JULY, 2020

Submitted by
SHIRAZ NAGARIA (177149)
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 PHASE-II

BUYING BEHAVIOR OF CONSUMERS TOWARDS

LUXURY CARS

INTRODUCTION TO PROBLEM.
The automobile industry in India is tightly competitive. This study aims at understanding the
buying patterns of luxury car buyers in the Indian market. The industry may seem to carry a very
insignificant percentage share in the total sales across the country, but it has a huge impart for the
consumers’ choice and the generated revenue for the government. The study aims at
understanding the dimensions of the buying behavior of various age groups in India.

LITERATURE REVIEW
Literature review is an important component in any research study to be done successfully. Due
to unavailability of much information on studies pertaining particularly to luxury car purchasing
behavior, the following relevant studies have been reviewed in order to gain more knowledge
towards the methodology, problem and hypothesis and are detailed as
P. Thulasi[1] Consumer Buying Behavior is the decision processes and acts of people involved
in buying and using products. Need to understand is why consumers make the purchases that
they make, what factors influence consumer purchases, the changing factors in our society. A
Branded car company needs to analyze buying behavior for: 1. Buyer’s reactions to a firms
marketing strategy has a great impact on the firm’s success. 2. The marketing concept stresses
that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers,
therefore need to analyze the what, where, when and how consumers buy. 3. Marketers can
better predict how consumers will respond to marketing strategies. Though extensive research
has been applied for the study as the consumer preference or buying behavior may be changed
over time.
Vikram Shende[2] Consumer behavior consists of all human behavior that goes in making before
and post purchase decisions. One can succeed in the competitive market only after understanding
the complex consumer behavior. An understanding of the consumer enables a marketer to take
marketing decisions which are compatible with its consumer needs. From study there are various
major class of consumer behavior determinants and expectations, namely socioeconomic,
psychological, political, geographical, demographic and Product & Technology. Further
classification of human behaviors under main categories will enable car manufacturer to align
their strategies in concurrence to customer behavior. While purchasing mini segment car though
customer is highly cost conscious but this segment is also upgrading their requirements and due

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to rise in disposable income, with in segment migration is observed, Customer is more inclined
to purchase Suzuki Swift, 120. For mid-size segment customer focus is for safety, driving &
seating comfort, brand. Also this segment requires value for money, best features and customer
friendly vehicles. In higher segment cars like Executive and Premium brand image is main
deciding factor which gives assurance of meeting their needs in terms of safety, performance and
feature requirements. Global brands are highly preferred in Executive and above segments. So
car companies should adopt the “Think-Global, Act-Global”. Approach in strategy making
which involves standardization across the world. Brand global presence is judged by consumers
based on availability around the globe with standardized products, brand name, distribution
channels and communications. By going global, the company will enjoy an increase in market
share, which indicates increase in demand for their products. With that, the company can
produce with economies of scale, reduce cost per unit and increase production efficiency
resulting in serving customers efficiently and economically. Most importantly, compared to local
brands, companies with global brands will be able to penetrate into markets more easily,
regardless to high or low status seeking consumers, global brands with proper strategy will
enable them to achieve an enhanced global image.
Ms.Puja Ahuja (2014), India is a country which has varied cultures, beliefs, customs and beliefs.
In such a complicated market, it becomes difficult for any foreign brand to enter and mark their
presence and creates a perception within the local audience. When we talk about the luxury cars,
the big brands that come to our minds at first instance are: BMW, Audi, Land Rover, Jaguar and
Mercedes-Benz. It is learnt that for any brand to design the strategies, it is important to firstly,
understand the buying decision of the people and also the demographic factors are to be taken
into consideration. Every country has their specific trends which are followed and then the
citizens decide on which products to the purchased. If we look into the deeper picture, there are
various factors that determines the consumer behavior and these factors can get influenced by:
the political policies which means the taxes and other restrictions levied by the local government,
apart from this the other factors could be the brand awareness, the availability of the substitutes
and another important factor that has recently got importance is the Age group and the male,
female preferences. The luxury cars in India have recently got importance in the country. These
cars are basically purchased by a person who belongs to rich category and are millionaires. In
past few years, there is huge increase in the number of millionaires in India and the purchasing
capacity of the people has also increased. Thus, the luxury car company have taken advantage of
this fact and has integrated in the Indian market and has launched cars for the millionaires. The
biggest challenge that is faced by the companies are to satisfy their customers even after their
product is sold, because in India the sales are affected by the word of mouth and that too the
sales are influenced by what the aspirants’ neighbors or family member has bought as it is in
accordance with their status symbol.
India became the fourth largest auto market in 2018 with sales increasing 8.3 per cent year-on-
year to 3.99 million units. It was the seventh largest manufacturer of commercial vehicles in
2018. (IBEF, March2020). The country with 1.4 Billion people, consists of various class of
population, distinct by income levels. This study aims at those portions of the population that can
actually afford a premium luxury brand automobile. In India, usually these people are considered

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HNIs- High NetWorth Individuals or UHNIs- Ultra High NetWorth Individuals. India is a huge
market for vehicles and possesses very high potential for luxury cars. Whereas, the luxury car
market penetration level in the country is low but leading luxury car manufacturers are betting on
the market’s potential. At present, the penetration rate of luxury cars in the country is
approximately 1.2%. Luxury cars sales in the country have increased at a rapid pace since 2012,
with approximately 17% rise in sales in 2017, with Mercedes-Benz dominating the market
studied. Mercedes sold 15,300 units in 2017 at a growth rate of 15.63%. Whereas, the BMW sold
9,800 units at a growth rate of 24.66% and Audi sold 7,876 units in 2017.
German luxury carmaker Mercedes Benz India emerged as the largest selling luxury car brand in
India in 2019 even as its sales skidded by 11.3 per cent, the steepest ever in a year in well over a
decade.
With this, Mercedes has held on to the number one position for the fifth consecutive year
bettering the four-year reign of arch rival BMW between 2009 and 2012. The Stuttgart-based
company, which also holds the pole position in global luxury car sweepstakes, sold 13,786 units
in India last year against 15,538 units in 2018.

STATEMENT OF PROBLEM
The luxury automobile sector in India is filled with tight competition from all players in the
market. Brands like Mercedes-Benz, BMW & Audi are top rivals in most major cities. The
research is conducted to understand the reasons behind the purchase decision of the buyer who
wants to buy that particular brand and why. The buying behavior of consumers in this industry
plays a vital role in reshaping the company’s existing marketing strategy to a revised strategy
that fills in the demand.

OBJECTIVES
Understanding the consumer’s behavior is an important aspect to any business. The study
primarily focuses on the relationship between various factors that influence the vying behavior of
consumers towards luxury cars in India. The main objectives of the study are:
 The objective of the study is to understand the buying behavior of the consumers with
respect to purchasing a luxury car in India.
 Another objective is to provide scope for further study in this segment as not much
details are available in public sources regarding this issue.
 In future scope to expand the same research study to a larger volume of of audience that
would help the brands capture more customers.

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HYPOTHESIS
H1: the sample size populace earns income above 15lakhs per annum
H2: the consumers are willing to purchase a new luxury car
H3: they already own or owned a luxury car
H4: price of the vehicle is the most important factor before purchase

METHODOLOGY
In this paper, descriptive research will be applied as not much is known about the problem.
Descriptive research will help us understand the what, where, when and how but not the why part
of the problem. It is a qualitative research, which will help understand the phenomenon. The
study will be conducted via a survey method with a sample size of 60. The sample populace will
be chosen on convenience basis. The respondents will have to be fulfilling the hypothesis
statements. The population will be restricted to India. The scope of the study is limited to
existing owners and prospective buyers of luxury cars in India. The study will be conducted via a
survey form sent to particular focused group of people.

SAMPLING DESIGN
In the study, the existing owners and the prospective owners of luxury cars in India will be the
population under study. The sample size of the study would be 60. The sample is chosen as
convenient sampling. The research requires study of a focused group of people, who own or are
planning to buy a luxury car. The scope of study is small; hence a small sample size is justified.
The owners of such cars are usually corporate executives, professionals or businessmen. In India,
it is considered that only the rich can afford such import brands.

THE SAMPLE
Following the guidelines of conducting a research in marketing, the sampling plan has been
formed. Convenience sampling has been used to present the findings. A sample of 60
respondents has been chosen through friends and family, and through personal sources of people
who own luxury cars and those people who know others who own luxury cars.

DATA COLLECTION TOOLS

A structured questionnaire has been devised for the collection of data. The questionnaire is
carefully structured to understand the problem accurately. A pilot study could not be conducted

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here due to lack of time and due to a small sample size. The probability of error will be tried to
reduce to the minimum.

DATA ANALYSIS

Out of the 60 respondents in the survey, majority of the respondents are males. The purchase of a
vehicle in a typical Indian household is influenced highly by the head of the family, usually a
male role played by the husband/ father in the household. The male role in the household may
insist suggestions from members of the family, but ultimately, the decision making power rests
in the hands of the male head of the family. Another reason for high male respondents may be
because the number of male users of cars is high in most places.

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Purchasing a luxury car or owning one in India is a matter of carrying a social status, an
impression on others that you are where you are because of your hard work and you can show it
with the car you own. Typically, in India, people don’t easily invest in luxury cars. This is quite
obvious because there are other investment opportunities they would prefer over a car. The study
showed that the respondents, from various age groups, the category of above 38 years of age is
the highest. A deeper study brought to light that most of the respondents in the <38 years of age
category are business owners. The second highest toll is from the age group 27-32, where, the
respondents mostly own a luxury car, which exhibits a sign of success in the social groups.

In the above pie chart, it is quite evident that business owners consist a large portion of the
owners of luxury cars in India. Following are professionals, who purchase luxury cars to show
class and prestige. Business owners, who have high disposable incomes usually buy luxury cars.
The trend has been the same over the years. According to popular sources, the business owners

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in India own most of the high end cars all over the country. Most of the car enthusiasts in India
are children of/ owners of luxury cars. Corporate executives do invest their savings in cars, but
not all of them prefer to have expensive luxury cars. Usually, the executives use company owned
cars with chauffeurs who drive them around.

Under this section, the income level of some respondents may be biased and untrue. But, on the
basis of the respondent’s answers, it can be drawn out that a large population under the study is
under the 20-30 lakhs of disposable income category. This could be because of bias from the
respondent’s side as some people are not comfortable disclosing the figures pertaining to their
income. The second rank is held by the income group of 30-40 lakhs of annul disposable income.
From the data analyzed, a large population under this category own more than one luxury car.
This is because either they have a larger family or having uses for the cars, such as one car for
the household work and the other for office routine.

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Under this section, the number of owners of luxury cars is estimated. Out of a sample size of 60,
the number of respondents who own a luxury car is at 42. Out of the rest, 9 respondents don’t
own a luxury car, and a large chunk of these respondents belong to the income category of 20-30
lakhs. Instead of investing in luxury cars, they insist in investing in the domestically
manufactured cars. 15% of the respondents are planning to buy a car. These respondents already
have decided the factors that would influence their buying preference, which helped the study to
know the role of each factor in their buying behavior.

This is the most important part of the survey conducted. This part of the survey helps understand
why would the consumer buy that particular brand of car. There is stiff competition in the
automobile sector in India, even in the luxury cars segment. brand name plays the most
important role in the buying process of the consumer. Every brand has their unique selling

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mechanisms, some in the way of discounts, some in after sales services, some provide free
services for a specific period of time. Secondly, the people who purchase these vehicles spend a
handsome amount on the cars, thus they will obviously want the driving comfort, which is the
second important factor while purchasing. Every brand has certain unique features that
differentiate them from other brands in the market. Every consumer looks for different features.
it is already known that an Indian consumer is very price sensitive. This case is also prevailing in
consumers buying luxury vehicles. The study shows that 24 respondents would look at the cost
of the vehicle before purchasing. 17 respondents, out of the total have also said that the average
per liter fuel consumption is also an important factor. This is mainly because these luxury cars
are performance cars and thus, fuel economy is quite low in most cars. A few respondents, who
know in near future they would wish to change their car have also mentioned that resale value
plays a major role in their buying process. Usually, the owners of luxury cars do not worry about
the resale value because they would end up buying another car and putting the former to other
uses.

Buyers who have knowledge of luxury cars, whether they own one or they have done their own
study from online sources, want some or the other technical attribute associated with the car.
Since most of the luxury cars would come under performance cars, 30% of the respondents
require that the car is best at performance, this could be based on the fuel economy or on top
speed of the car, whichever the consumer is looking for particularly. Owners who wish to use
their car for family purposes usually look for space as a technical attribute preference. Evidently,
if a person is spending that amount on a car, he will ask for safety features. currently in the
Indian market, under the luxury segment, Volvo rates the highest in terms of safety. The users
who want to use that car for a long period would ask for durability. But, in the study it is seen
that the respondents do not particularly look at the durability because the cars are obviously
durable, being an import, it would be made in such a manner.

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Driving the same car as your peers may be important to some and may not be of importance to
others. Under the study, it is drawn that 18 respondents feel that it matters whether they drive the
same type of car as their peers. This trend is more with the professionals. In a likely scenario
where professionals meet together, they notice what type of clothes the other is wearing, the car
they drive, whether an SUV or a Sedan. Business owners also show a similar trend. Under the
study, 18 respondents say that it is very important to them that they drive the same car as their
peers, while 17 say that it is important for them to drive the same car as their peers, 9
respondents are neutral, 9 say that it is of less importance to them, while only 7 do not consider
that they drive the same car as their peers. An important fact that is drawn out from this is that
Indian buyers would prefer buying a car that is comparable to their peers.

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The respondents who own a luxury car have answered this part of the survey. Mercedes-Benz
holds the highest share in the indian market, in the luxury cars segment. Mercedes-Benz, over the
years has introduced several cars which have gained high popularity. A UHNI would prefer
buying a Mercedes-Benz S-Class over other executive vehicles as the car shows a sign of
elegance and perfection. Most of the respondents own a Mercedes-Benz. Following the brand is
BMW, which is preferred by performance enthusiasts who look for the best ‘under the hood’
features. following BMW is AUDI, the brand which has gained a lot of popularity over the years.
The design of Audi cars shows the creation of the perfect car. Jeep has also managed to tap into
the market with the introduction of the Jeep Compass. The premium car brand tapped into the
SUV segment with the compass which enabled them to gain a good share in the market. Land
Rover, Volvo and Porsche are cars usually owned by UHNIs, so under the study, not much
information can be drawn out.

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The satisfaction level amongst the owners of luxury cars is drawn from the above figure. It is
seen that most of the respondents are either satisfied or highly satisfied with the current car they
own. This satisfaction comes from the experience of the person after buying the car. The reasons
for satisfaction could be good driving experience, after sale services, fuel economy, safety
features, etc.
The respondents who have scaled their satisfaction at low or very low are proabably not satiafied
with the purchase as they expected more, or it is possible because they couldn’t match the
satisfaction they had from a previously owned vehicle.

Out of the respondents who actually answered here, it is important to note that only 2
respondents say that they wouldn’t buy the same brand of car again. This has multiple reasons. It
could be because the person wants to own diverse brands of cars, he may be dissatisfied with his
current car, or he expected more from the brand and they did not deliver accordingly. A high
frequency is seen in people who would actually want to or are thinking of buying the same brand
car. The brand they have bought probably serves them better. This would make them likely to
purchase from the same brand again.

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CONCLUSION
From the above analysis of data from respondents through the survey, it is quite clear that what
the car brand does for the buyers matters a lot. The respondents have shown brand sensitivity and
price sensitivity, which tells us that the brand should work on keeping the customers under their
brand popularity. People would want to repurchase the same brand only if they are satisfied with
the previous purchase. Another important learning from the study is that Mercedes-Benz has
proven to be the most preferred brand for most respondents. It is not only in this study, but under
other studies as well, pertaining to particular locations, Mercedes-Benz has proven to be the
strongest. There exists stiff competition between Mercedes-Benz, BMW and Audi. After reading
through about the exposure of various brands in the Indian market, Historically, Mercedes-Benz
stands the oldest in the country. They managed to capture the market in the 1900s and they have
managed to be the strongest even today.

PHASE-III
SWOT ANALYSIS FOR MERCEDES-BENZ AG
STRENGTHS
 Strong presence in growing economies: A growing economy holds greater potential than
what some scholars believe. Taking example of India, Benz has a strong presence in the
country, where they hold the largest market share in the premium automotive segment.
since the economy is growing, there lies great potential in gaining higher sales and
greater brand value in the county.
 Innovation: The company, historically has been the most innovative brand. Mercedes-
Benz created the trend of cars and continues to create innovative technologies in the
cars that maximize the customer experience, making them a leader in the market. The
company has many patented safety features, which differentiate their product from
other brands.
 R&D: Mercedes-Benz invests highly in their R&D activities, developing technologies for
tomorrow. The company produces some of the most incredible vehicles ever seen. The
R&D infrastructure increases the overall cost for the company, but in turn, the R&D
department comes with great results which has created the brand value they have
today to an extent.
 Global market share: over the years, Mercedes-Benz has held a strong presence in many
economies and has managed to be the leading brand in that country. Globally speaking,
the company holds the largest share in vehicles sold.

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WEAKNESSES
 Expensive cars & spares: Being a luxury brand, it is obvious that the cost of vehicle and
spares would be high. But, in the competitive nature of the luxury automobile industry
requires that Mercedes-Benz bring down the cost to consumers. This will help boost
their global sales and also help in retention of customers.
 Tapping into EV segment: compared to other competitors, Mercedes-Benz has not come
out with many Electric Performance cars. For example, AUDI has launched the E-Tron,
which is an electric performance vehicle, while Mercedes-Benz is producing hybrids still.
The pace of production of EVs is low.
 Narrow range of customers: Mercedes-Benz, being a luxury carmaker has a low
customer base. Only those who can afford the cars are under the focus group. in my
opinion, the company should try decreasing cost of purchase of the cars, the customer
base may increase significantly.
 Highly competitive markets: as mentioned earlier, there is stiff competition in the
automobile industry globally. Mercedes-Benz faces competition from BMW, AUDI, LAND
ROVER, etc., which makes it harder to gain access to untapped markets. There is no
geographical region where only one brand would be involved.

OPPORTUNITIES

 Developing future cars: every country has their own emissions norms and these norms
are becoming tighter with time. To tackle this and to bring forth revolutionary changes,
Mercedes-Benz would need to invest more into production of hybrid vehicles and
electric vehicles. The automobile industry is currently experiencing that shift globally,
with brands moving towards production of future cars.
 Tap into developing countries: the purchasing power of consumers in developing
economies is increasing with the level of income and due to impact of globalization.
With this, Mercedes-Benz can fill in the market gaps in developing countries.
 Expansion of Daimler Trucks and vans: The financials of the past few years show that the
Mercedes owned subsidiaries that produce vans and trucks have falling sales. The
reason for this is high cost of the commercial vehicles. The company can invest more
into the trucks and vans division, invest in R&D, move production sites to more
favorable location, which could increase the revenue generation from that segment of
vehicles.

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THREATS

 Development of public transportation: From the viewpoint of a country’s government,

improvement in public transportation facilities is a good sign. But from the view point of
car makers, it is the opposite. Better public transportation systems mean that people
would prefer travelling by public mode of transportation rather than driving themselves
to work or other places.
 CO2 emission regulations: with increase in fuel powered vehicles around the world,
some countries have started having stricter emission norms, which would mean that the
car producer has to comply by those norms in order to sell their vehicles.
 Competition from Japanese Luxury car makers: brands like LEXUS (under Toyota) and
INFINITI (under Nissan) are producing cheaper and more durable luxury cars. This poses
competition for Mercedes-Benz because these manufacturers produce a lower cost, and
almost similar product, with comparatively similar performance and durability
standards.

RECOMMENDATIONS FOR ACTION

 Expansion into untapped markets: Mercedes-Benz has presence across the globe, with
establishment in several countries across most continents. Within the African Continent,
there are only 3 dealerships across the continents which are in Kenya, South Africa and
Egypt. If Mercedes-Benz expands to other African countries, the scope of business
increases, and this is a good sign for the company. Obviously, there are many factors to
consider before establishment in a foreign country. From a personal learning, I
understand that Tanzania is a business flourishing country, where there are good
proportion of substantially rich individuals who can afford luxuries. Here, Mercedes-
Benz has an opportunity. Likewise, there are other countries such as Uganda, Zambia,
DRC, etc. where great opportunities lie for the expansion of dealerships.
 Increasing investment in EV segment: the trend of performance cars is changing from
the current fuel combustion engine to hybrids and Electric Vehicles (EVs), powered by
batteries. Currently, tesla’s Model-X has proven a significant change in the way
consumers view an eco-friendly performance car. Before, if a car owner wanted to tune
his car for better performance, he had to get the cars hardware (under the hood
machines) replaced. But now, it’s all controlled by software. Tesla provides regular
updates on their cars which even increase the cars performance in terms of
horsepower, better battery capacity, better driving experience, etc. thus, it is very
important that Mercedes-Benz have an approach towards investing more into EVs. The
idea of electric vehicles is currently being slowly accepted by consumers worldwide. In

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 the coming decade, there could be a revolutionary shift in the way people see what a
car is.
 Cost efficiencies: Mercedes-Benz being a Luxury carmaker, it is quite obvious that the
price would carry a large premium due to various luxuries and features of the car. But,
currently, consumers are looking for luxury cars at a lower cost. Among the youngsters
in India, a study shows that BMW is preferred over Mercedes-Benz because of the fact
that it would cost them a little less, but provides almost a similar characteristic profile.
Thus, in order to capture the market gap, Mercedes-Benz could lower their profit
margins, allowing more customers to buy their products.
 Autonomous driving: the autonomous driving capabilities of Mercedes-Benz has been
installed in the top range cars for parking assistance, driving ease, etc., but the company
has not managed to create a complete autonomous driving experience car. Car brands
like Tesla and Audi have already launched production vehicles with complete
autonomous driving experience. If Mercedes-Benz manages to tap this feature in the
production line cars, it can be a spectacular plus point while a consumer wants to
purchase a car.

LEARNINGS

P-1

Mercedes-Benz revolutionized the automobile industry: the first internal combustion

engine based car was introduced by Mercedes-Benz, while gradually over the years
moved forward with innovative technologies and thus leading to the modern car we see
today. The brand has over the years created an amazing brand Image and has
penetrated in most major markets. Mercedes-Benz is a symbol of luxury, elegance and
perfection. The brand has managed to capture some customers who have been loyal to
the brand over decades. The company has an excellent top management team with
experienced managers in the industry who thrive to make the company better by the
day. 

Sales: after reviewing sales figures of Mercedes-Benz AG of the past couple years, it is
observed that the sales of trucks and vans has been gradually falling over the past few
years. On the other hand, the sales of Mercedes-Benz cars have been rising
substantially. The company has to invest more resources into marketing of their trucks
and vans. The competitive nature of the industry makes it tough to increase the sales
level. Unlike brands like Scania and GM, Mercedes doesn’t only specialize in
commercial vehicles, rather they have a blend of different vehicles supplied worldwide.

Substantial global share: globally, Mercedes-Benz holds a great position in sales of

luxury cars. Across the world, the brand has created an excellent brand image, with
loyal customers going back ages. The innovation in technology adopted by the
company has enabled them to gain much more over the years. The R&D plays a vital

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role in this. It is where the innovation process starts, giving customers a better driving
experience and more luxury with every car.

Experienced Executive Team: The Board of Directors consist of executives that have
been in the organization for over 15-20 years, which means that they have vast
experience in the industry and know what steps would be necessary for such a large
organization.
The BoD, even during the pandemic situation, have worked from home, tried their best
to produce best results in the conditions.

p-2

 Role of Gender and Age: in the study, it is observed that a majority of the
respondents were male, which points that decision makers in households are usually
males in the Indian context. Another interesting learning is that the age of
respondents was more in the category of <38, which points that most Luxury car
owners in India are usually of a higher age group. Since Luxury cars itself are really
expensive, it suggests that the purchasers be wise decision makers.

 Influence of brand name while purchasing: in the study, it was found that brand
name plays a really important role in the purchasing process of a luxury car. Brand
name means the attached identity of the product. If an organization is able to embed
a good brand name is a market, they are more likely to prosper. Brand image lets
the company leverage their product over other options. Thus leading to better brand
value. Mercedes-Benz, today has a large customer base, which is mainly because of
the brand value created through the years of hard-work in maintaining a great brand
image.

 Social cues: under the study, the respondents were asked about the importance of
driving the same car as their peers and the result showed that driving the same car
as their peers was a highly influenced factor for a large number of respondents.
White collars job holders usually are involved socially with their peers. These peers
are usually of the same income level, and to show that they have the same standard
of living, buying a similar car as them seems to be of great importance. 

 Re-purchasing behavior: under the study, the respondents are more likely to
purchase the same brand of car again. Since the automobile company has given
good after sales services to its clients, they wouldn’t mind going there again in the
future. The quality of service provided by the automobile companies is a major factor
that influences the recurring of customers at the showroom. Since luxury cars are of
great value, it is not that customers would regularly visit the car showroom for
purchases.

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P-3

 Threat from changing government norms: there is a requirement of shifting focus from
combustion engine based vehicles to alternates like hybrid vehicles or Electric Vehicles
(EVs). This shift is necessary as governments in many economies are changing the
emission norms due to sustainability issues towards the environment. Also, from the
consumers’ studies, it is revealed that consumer trends are moving towards EVs, which
is mainly because companies like Tesla and Audi have managed to produce EVs that
match the performance standards of sports cars and supercars.

 Competition has led to improvement: carmakers today produce cars that are highly
competitive in the respective market. This competition enhances the cars overall
features, making it beneficial for the end users. Thus, competition has enabled
improvement in the product. The competitive nature of the industry is the main reason
for similar price range in similar type of cars by different manufacturers.

 Investment in R&D has proved beneficial: Mercedes-Benz spends highly on their R&D
activities and history has proved that it has been highly beneficial to them. Mercedes-
Benz has been responsible for some of the most innovative car technologies developed.
Further, if the company’s investment in development of EVs is used fruitfully and if the
company manages to display another significant innovation in the industry, the
company might penetrate faster than companies like AUDI and TESLA, mainly because
of the Brand image they have maintained.

MANAGERIAL IMPLICATIONS
 All functions of management are important to run such a huge company so efficiently:
throughout the project, it is understood that the functions of management, namely;
planning, organizing, controlling, directing and recruiting have all been applied from top
management to the lower managerial positions. The large organization requires
planning at every step. Any move the company makes could negatively affect them.
Organizing plays a vital role in the structure formation of the organization. Directing and
controlling help in orientation of the workforce.

 Entry for new players: In the automobile industry, competition is high and the initial investment
would be so high that companies wouldn’t think of entering in this industry. The latest entrant
we can see is TESLA, which was funded by investors and later raised an IPO, which boosted their
investment. But more importantly, Tesla has survived the competitive nature of the industry

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 because the cars produced by Tesla are one of a kind they can compete with the fuel
combustion based cars that other companies produce today. Only if a company like Tesla comes
to picture that can revolutionize the automobile industry, it would be highly unlikely that a
company could stand the investment and competitive nature of the industry.

 Future turn in trend: it is highly likely that in near future, consumer trend is going to shift.
Consumers, being aware of the environmental impact of combustion engine based cars, would
willingly shift to Electric Vehicles (EVs). At this situation, the demand for EVs will increase by a
great deal. Mercedes-Benz, in this situation will need to cater to the needs of consumers rapidly.
Hence, the company should gear up to fulfil this demand with better cost efficiencies as
currently EVs are priced high in India.

 Expansion in Africa: with increasing globalization, some of the underdeveloped

economies in Africa are moving towards becoming developing economies. Thus, this
gives an opportunity to Mercedes-Benz to expand their horizons more into the African
Continent. Currently, the company holds a dealership in Kenya, South Africa and Egypt.
Africa being the second largest continent has several countries that have great potential
for expanding into.

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References:
 https://www.daimler.com/company/business-units/mercedes-benz-cars/
 https://www.daimler.com/company/corporate-governance/board-of-management/
 https://www.autoevolution.com/mercedes-benz/
 https://www.daimler.com/company/tradition/museums-historical-sites/carl-benz-
workshop.html
 https://www.daimler.com/company/tradition/museums-historical-sites/50-jahre-
einfahrbahn-untertuerkheimspecial-topic-article.html
 https://www.daimler.com/investors/share/outlook/
 https://www.daimler-mobility.com/en/company/news/statement-franz-reiner-covid19/
 https://jarretlevine.wordpress.com/2017/04/25/chapter-16-organizational-culture/
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reasons-why-the-indian-luxury-car-buyer-has-not-changed/65586907

8. https://www.businesstoday.in/sectors/auto/mercedes-maintains-the-top-spot-in-luxury-
car-segment-for-5th-year-in-a-row/story/393574.html

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