MERCEDES-BENZ CORPORATE STRATEGY IN EMERGING MARKETS

Submitted for: BMA5013 Corporate Strategy, Prof. Sai Yayavaram Submitted by: Pia Rauch Akhil Singhania Ayush Trivedi Jaime Garriga Beloso Lüthje Brandt

Submission date: 04/11/2011

MERCEDES-BENZ – CORPORATE STRATEGY IN EMERGING MARKETS

TABLE OF CONTENTS
1. 2. 3. 4. 5. 6. 7. 8 GLOBAL HISTORY................................................................................................................. 1 MERCEDES-BENZ IN INDIA ................................................................................................. 3 MERCEDES-BENZ IN CHINA ................................................................................................ 6 SIMILARITIES & DIFFERENCES IN EMERGING
MERCEDES-BENZ IN INDIA
First Mover Advantage – Mercedes-Benz was the first luxury car maker to enter the Indian market in 1994, as a joint-venture between Daimler-Benz AG and Telco (presently Tata Motors). After Daimler merged with Chrysler, the Indian company was renamed as DaimlerChrysler India Private Ltd. In 2007, when Daimler sold out its shares in Chrysler, the company was renamed Mercedes-Benz India. Daimler-Benz India started its manufacturing facility in 1995 when the automotive regulations in India were relaxed for foreign manufacturers. The plant was built in Pune with a large investment of Rs 6 Billion (US$150 million) and was one of the few other manufacturing units for the company outside Germany at that time. This move showed a long term commitment of the company towards the Indian market as a future automobile hub and the reasons for this investment can be seen as per Porters 5 forces in Exhibit 3. Prior to the development of the plant all foreign manufacturers such as BMW and Audi including Mercedes-Benz were selling completely built units (CBUs) which attracted a 110% import duty. The plant in Pune started importing completely knocked down units (CKDs) from Europe and started assembling them to manufacture the car units. The CKDs not only attracted only a small percentage of import duties as compared to CBUs but also reduced the time of delivery to customers to a few weeks from 2-6 months for the CBUs. DaimlerChrysler executives believe that