The Hindu Business Line : Stronger euro impacts DaimlerChrysler profits

"Because of the appreciation of the euro against the rupee, we paid nearly 34 per cent more on raw material price," the DaimlerChrysler India CEO and Managing Director, Mr Hans-Michael Huber, told Business Line.

He said that in two years the euro appreciated by 20 per cent leading to dip in profits by 11 per cent to Rs 34 crore during 2003.

"Hence we were forced to hold back giving full benefit of reduction in customs duty to our customers."

Last month, the Government reduced peak Customs duty rate to 20 per cent from 25 per cent and abolished four per cent special additional Customs duty. Mr Huber said DaimlerChrysler could maintain the same level of profits during 2004 if its turnover and volume increases by 10-15 per cent.

The company sold 30 per cent more cars at 1,580 units in 2003 compared with 2002 while turnover increased 35 per cent to Rs 434 crore.

The `C' class continues to be its best selling model. In 2003, the company sold around 700 of these cars compared with 500 units in 2002. The second-best selling car was the `E' class, which sold 650 units.

`Maybach may not sell more than 10 units'

DAIMLER Chrysler does not expect to sell more than 10 units of its costliest model, the Rs 5-crore Maybach, but is already lining up a nationwide road show for the customers to get a first-hand experience.

"Ten is a huge number for India," said Mr Hans-Michael Huber, CEO and Managing Director of DaimlerChrysler India.

In 2003, when Maybach was reintroduced, the company sold around 500 of these cars worldwide.

Mr Huber said that the company has been receiving several enquiries. "But we don't know how many of these will result in firm orders."

The company will take the car across major cities in the country and invite potential customers to drive the car for a day.

"We want the customers to get involved. Our marketing executives will spend a full day with them once they express interest."

Once an order is received, the customer will be requested to give specifications as each Maybach is customised. "Each car is manufactured individually as per the specifications of the customer."

DaimlerChrysler offers owners a comprehensive warranty and bears all costs for the car's servicing and maintenance for a period of time agreed individually with each customer.

Transport of the car from anywhere to the next service centre is also part of the service package.

At its production headquarters in Sindelfingen in Germany, customers can pick and choose over two million ways of equipping their luxury car.

This includes a range of 17 paint finishes for the exterior and an array of wood and leather for the interior.

The company has also invested in a $30,000 laptop with a Maybach programme that allows customers to configure the car to suit their personal taste.

It has a 5.5-litre twin-turbo V12 engine with over 500 hp and 664 pound-ft of torque and is equipped with electronic braking to provide faster brake response with exactly the right brake pressure at each wheel.