With 34percent sales growth and comparatively lower prices, company hopes to sell more cars than parallel imports

Official distributor Mercedes-Benz (Thailand) hopes to sell more cars than grey market importers in 2013, a feat that could change the way things go around in the highly competitive luxury car market.

Last year, the German carmaker sold 6,247 vehicles in Thailand - a growth of 34 per cent over 2011 - considerably beating its original sales target.

MBT president and CEO Alexander Paufler said the increased sales came from the expansion of its model line-up in the Thai market, as well as the introduction of new technologies on a continuous basis. He said Mercedes-Benz is capable of responding to a wider range of customers, and has been able to maintain its leadership in the luxury car market for the 12th consecutive year.

According to Paufler, this year will be another successful one for Mercedes-Benz.

However, MBT also has another important mission: swiftly leaving behind grey or independent importers sniffing the dust.

While Mercedes-Benz is the most popular luxury car in the country, they are sold through official dealerships appointed by MBT as well as a large number of grey importers.

Late last year MBT officials came out and commented that Thailand lost as much as Bt50 billion (US$ 1.7 billion) from the almost 6,000 imported Mercedes-Benz cars due to tax evasion by grey importers.

MBT vice president for sales and marketing Martin Schulz spoke to a local news daily about his company's plans for this year.

Schulz has been stationed in many markets including Vietnam, but spending a year in Thailand has given him huge experience.

Thailand is a large market where Mercedes-Benz is considered a status symbol, and the luxury car market is highly competitive with the presence of a large number of grey importers.

One of the missions Schulz is responsible for is to claim back the throne for MBT from the grey importers. This has given him the nickname "Grey Killer of Thailand".

According to Schulz, MBT's decision to refuse to service vehicles sold by grey importers has pulled back a large number of customers for the company, along with a larger vehicle variety.

"In 2012 we collected the sales figures of all Mercedes-Benz vehicles in Thailand and a total of 13,000 were sold and registered, which is a very high number. But from that amount, only 6,247 were sold by authorised Mercedes-Benz dealerships, meaning that the rest were sold by parallel [grey] importers. So our equation is how to pull back these figures," he said.

"Today, more customers are deciding to purchase from authorised dealers and we can see the trend from last year's sales figures. That was our first success. Customers came back to us because they have trust in our quality, safety and excellent value, especially considering our decision not to service vehicles purchased from grey importers starting from 2013.

This is an important factor that will produce long-term results," Schulz said, adding that Mercedes sales in January this year surged by 80 per cent compared to the same period last year.

SIX NEW MODELS FOR 2013

Mercedes offers 15 models in Thailand, and plans to launch six more this year, Schulz said.

MBT will showcase the CLA concept car at the upcoming Bangkok International Motor Show in late March, and will launch the E 300 BlueTEC Hybrid, its first hybrid model for Thailand. The car is powered by a diesel engine plus electric motors developing a combined 750Nm of torque, and boasts a fuel economy of 22 km/litre.

"Most importantly, we plan to assemble this model in Thailand, hopefully this year," he said.

Schulz noted that the new CO2-based auto tax structure has turned the market into an interesting and eco-friendly one.

Another strategy that will help customers return to MBT is the retail pricing adjustment. Schulz said the company had previously lowered retail prices by 15-25 per cent on average, which yielded good results.

Removing unnecessary features such as heaters or snow-proof glass from the cars in order to lower costs is something that MBT is able to do, but not the grey importers, he pointed out.

The CLS 250 Shooting Brake is a great example, he added.

"We launched the CLS 250 Shooting Brake in November at B t4.99 million for the standard version and Bt 5.39 million for the AMG version. However, the prices offered by grey importers that introduced the cars a few weeks before us was Bt5.89 million. Our price is Bt 500,000 lower, but if you also consider the number of features, customers are paying Bt750,000 less for our cars.

In addition, we have special financial offers from Mercedes-Benz Leasing, such as the A-Class programme that comes with many interesting packages," Schulz revealed.

MBT is also moving ahead with its "Proven Exclusivity" used-car programme to provide integrated services for customers who want to trade in or purchase used vehicles.

BT1-BILLION INVESTMENT

Another strategy for Mercedes this year is the development of a sales and after sales network so that they carry the same standards countrywide.

"This year we plan to open two new showrooms [in Nakhon Ratchasima and Prachuab Khiri Khan], as well as offer special privileges to Mercedes Card holders to strengthen relationships as well as create maximum customer satisfaction," he said, adding that MBT will be spending as much as Bt1 billion this year.

"The activities that you can include is the A-Class test-drive event in which we have invited more than 600 target customers to participate; we will stage similar activities for other models that we launch later this year," he said.

More than 600 orders have been placed for the new A-Class since it was launched in December last year.

MBT EYEING COMPACT-CAR MARKET

Mercedes plans to introduce five models in the next three years from on the A-Class platform for the global market. Thailand is included.

"We have already launched the A-Class, and other models will follow. We have a customer base of approximately 4,000 people and we believe that this is a great opportunity to reach our targets for the future without much difficulty," Schulz said.

With MBT driving ahead to claim its throne from grey importers, Schulz said that during his term in Thailand he would be able to push Mercedes sales above the 10,000-vehicle mark, which had been achieved in the past during the distributorship of its Thai partner Thonburi Automotive Assembly Plant.