Mercedes-Benz, the first luxury brand to offer 'cars on lease' in India

‘Cars on lease’ is a concept which is comparatively new to India, though not unknown, but has been a popular business abroad. However, the Germany-based auto giant Mercedes-Benz is the first  luxury car maker to introduce such notion in India by planning to initiate this process, later this year. Maruti India is already into leasing vehicles to public sector companies on monthly basis. Mercedes-Benz India (MBI) intends to lease out the cars first to the companies and once the idea begins to settle down, hopes to spread out by leasing it to the individuals as well.

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Peter Honegg, the Managing Director and Chief executive officer of Mercedes Benz India says that, with Indians who prefer to own a car rather than taking on lease, they are into serious discussions to lease out its luxury cars to companies to start with. The Mercedes Benz dealers would first purchase the cars from the company, who in turn will lease it out to the corporate offices for a certain period of time and after this time period, the leased cars will be returned to the car pool of dealers, who will sell it back into the used-car market through the companies’ ‘Proven Exclusivity’ program. The details are yet to be outlined for this new venture.

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Mr Honegg had also mentioned that this leasing concept will enable MBI to introduce comparatively newer cars into the used-car market. They will have between three to four year old cars which will enable the customers to get these luxury cars brand for lesser price in the pre-owned car market. Mercedes is apparently the largest dealer of pre-owned cars in India with about 35,000 such cars plying on the Indian roads.

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With Mercedes-Benz cars on one hand, the other luxury cars brand BMW has also gained its momentum with a sales record of 6, 246 vehicles, while Mercedes-Benz could only make 5, 819 units sale during the last year. These big brands have brought their new car models into the Indian auto market, which is fast emerging and expected to become the third largest auto market after the U. S. and China in another decade.

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Shashank Srivastava, the General Manager of Maruti Suzuki India Ltd. says that leasing out vehicles is a hassle-free mode of owning a vehicle, where the company takes care of the maintenance and servicing of the vehicles during the lease period. Maruti India is already into this business with 600 vehicles put on lease per year through financial institutions, which by all means a small number, though with gaining popularity. There are in all 25,000 Maruti India vehicles on lease so far. We have to wait and see how popular Mercedes Benz India is going to make of this concept.

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