The Sports Tourer would be the most affordable car from the Mercedes stable in the sub- 25 lakh price bracket. The Indian subsidiary of daimler AG, currently sells its C-Class at 28.56 lakh (ex-showroom Delhi), its cheapest offering in India. Luxury carmakers operating in India are driving a bulk of their sales from entry-level models. For BMW, its lowest priced X1 forms around 30% of its annual sales in 2011 and Audi’s cheapest car in India at 26.5 lakh, the recently-launched Q3 compact SUV lakh, has taken the market by storm.

The B-Class, which is ranked lower in the premium segment, may provide some robust numbers for Mercedes, after sales in the first quarter for the luxury carmaker dipped 24% to 1,257 cars. “We are targeting all new set of customers with our first multi-utility Tourer option in the country. We have already expanded into the tier II cities and market which are expected to bring large incremental numbers on this globally successful product,” said Mercedes Benz India director (sales & marketing) Debashis Mitra said. Globally, the company sold over 70,000 B-Class since its launch in November 2011. It is looking at a similar response as its comeback strategy in India, may continue to face tough times like some of its peers. Mercedes’ strategy could work as its gets into the lower end of the market and generate some strong numbers. The B-Class will hit the Indian market in September this year and the biggest Mercedes-Benz advantage will be of not having any direct competition. The company will enjoy sole first mover advantage with the global competition for the B-Class may take some more time to arrive as debut of audi A3 sportsback, VW Tourer, Ford C Max and the critically acclaimed BMW World Series Sports Tourer is still far away. Basically designed as a ‘tall boy’ crossover vehicle, B-Class will not take away any BMW X1 or Audi Q3 customers, but is expected to generate a new breed for the company.

“The Indian luxury car market is facing challenging times and companies have to bring in fresh products to maintain their novelty and beat slowdown blues. India is a value conscious market, where launches could get additional volumes and new customers who are looking at buying newly-introduced products,” says Wilfried Aulbur, Managing Partner of , strategy consultants in India. Aulbur at one point led Mercedes in India.

As its sales wane, Mercedes is expanding its territory to include smaller towns. “We are focusing on new markets with such new vehicles. While metros would be strong on demand, the smaller cities like Indore, Nagpur, Raipur, Surat, Vadodara and Bhubaneswar are generating monthly car sales of 8-10 cars, which is very important in a limited market of 25,000 luxury cars sold in India every year,” Mitra said