German premium marques BMW and Mercedes-Benz have uncovered a unique tactic for the Indian market – selling “stripped out” variants and going down the “value for money” route. Bizarre? Read on.
Unlike in Europe, premium badge customers in India have very little say in customising their rides and choosing options. So it’s high spec at a high price, like in Malaysia. When BMW and Mercedes brought in variants of the 3-Series and C-Class without extras such as leather, sunroof, parking sensors, electric seats and high end audio systems, it was for the car rental market and no advertising was done. But word got around and private customers started to ask for these affordable premium cars, so this isn’t the ingenious marketing solution that it looks like but more of a fluke!
Marketed as “Corporate Edition”, the reduction of a few lakh rupees opens BMW/Merc ownership to customers that are shopping for high-spec versions of cars such as the Toyota Camry, Honda Accord, Skoda Superb and Nissan Teana. The bare Beemer goes for Rs23.95 lakh, Rs3 lakhs (about US$6,600) cheaper than the standard car. Expect to pay around Rs26.27 lakh for the base C-Class, which makes it a whopping Rs6.22 lakh (about US$14,000) cheaper than the high end version.
Stats from BMW confirm that in the three months since they started selling the 175 bhp/350 Nm 320d CE models, 305 units have found buyers, which is within expectations. Mercedes joined the base model party in April. Premium badged cars without much toys are actually quite common in Europe, where buyers get more freedom in choosing options. Do you think such variants will work in Malaysia?
~RM 50k (USD14000) is a lot of money…you practically can buy a descent local made car (see persona base line) with the money you save…hmm…interesting….
i mean *decent
Cheaper and more affordable BMW / M.Benz will be welcome for everyone. (USD 14K) is alot of money, I fully support this idea, but I doubt our gov will allows that to happen here.
it’s always good to give people the option to buy what they want. I am sure that BMW and merc will get more sales if they sell stripped down versions as there are many out there who would rather buy a badge rather than see what they are really getting for their money.I went to try out the 320 (RM236,000) and was taken aback by how spartan it seems,even has manual driver’s seat.however,those who pay for full specs cars may not be so happy that their “house on wheels” becomes more common as there will be some people who buy low specs and change the badge.saw a cherry alado today with a mitsubishi badge. a friend of mine had a E60 520 which he put a 530 badge to “feel good”
i agree, like my neighbour’s 1993 mercedes E class which he put on AMG badge to himself feel better…
Got FEEL of engine handling boost muh.. a lot of beamer owner puts M badge oso. Luckily, I havent saw any Merc with M Badge or Beamer with AMG Logo, yet…
Definitely Paul – I would certainly be happy to spend hard earned dollars on a bread and butter 3xx/Cxxx which I know will get me from A to B safely, with no fuss and to also last a good many years.
Given that current ‘non-national car’ duties are unlikely to go away anytime soon, I’d like to think that there would be a market for such models. Would other Malaysian motorists agree?
Agreed.
Yes, now please!
It is good to have customisation on your own car. Sometimes dealers bring in the models is too limited or too many accessories and equipments, making people have to plan carefully on paying the price of the car.
If BMW or Merc does that in Malaysia..
I guess P***** & P****** will surely go bankrupt.
Why would they go bankrupt? The cars would still be quite pricey, much more expensive than P & P.
Even the bare BMW or Merc would still be out of reach of us mere mortals.
haiya dizzy.. u r so funny lah..
who are you man? my shadow/imposter?
The impact will not be at P&P level but at the pseudo luxo models. Here in Msia, some jackasses categorize Accords & Camry’s at the same level as 3 series, C class and the A4.
So if Merc or Bimmer brings in these stripped versions, the prices would be slightly higher or at the same level or slightly lower than these Accord/Camry level. I would rather drive a “plebian” version of the C or 3 series than a loaded Accord/Camry. It’s a bimmer.
But the biggest noise will be made by the grey market importers like Naza who will have sales of the their Japanese recon models reduced or at least drop their fat margin’s. Most of these chaps are UMNO guys, so I doubt stripped down versions of these vehicles will be allowed into this country.
Of course it will work in Malaysia. Some Malaysians will buy badge to show off. So they will go for bare minimum.
Some Malaysians love to modify car, so they get the bare minimum and then tinkle to their heart’s content.
Some Malaysians are a very basic driver, so they don’t really need the “extras” like electric seat, sunroof, iPod point, GPS etc etc
Some cars the combination is not really practical i.e when the seat colours are light, so if we buy bare minimum we can choose the darker leather colour.
Bottomline, it makes biz sense to give options to people to buy what they really need.
Hmm, you might be opening doors for BMW and Merc to offer very bare basic car accompanied with pages after pages of high priced options. Want leather seats, that’ll 15k guv’nor.
yes…, so i can spec a sunroof on my bmw
Fuyoo!!!…if this implemented in m’sia…i’ll be putting aside a certain of my salary to buy the car…but to think again…this is m’sia…defintely it will be given a NO GO by the G.
Even in the UK their consumers get a lot of these as options. U can have a beemer with less the extra nice-to-haves by paying a lot less also. Thats what they should do here in Msia also, not just sell it as a premium spec’d car… i can live without leathers, a sunroof, parking sensors (brothers sell for dirt cheap), gps (my handphone already has one), premium stereo, etc…
BMW!!!! If u’re watching…. Please do this!!!
Don’t think it will work in Malaysia with Koreans offering more “toys” as standard. If you don’t include all the toys, then people will say too expansive cars, but little value. All the continental imports sold in Malaysia are special speced up models from overseas.
Esential stuff like:
reverse sensors
USB/mp3 connectivity
Auto gear box – for most of it
are a must. Then when you have Mp3- you want audio and I don’t think bmw owners want an aftermarket unit in the dash which will make the car look very ugly.
Thinks which could be dropped include:
Sunroof- not sure why they still bring this in
Leather seats – Its too hot in Malaysia to use these kind of seats anyway. Also these seats are sometimes slippery. Then there is the need to polish it every once in a while if not they crack. Only reasons I can think off is easy to clean spillage, and that premium feel. I suspect its more of that premium feel rather than pure practicality
Heating enable AC- I have seen in Volvo’s where the heater actually works, which makes no sense in Malaysia.
Notice how the car makers can still bring in cars even though out of AP? They buy it from undergrads too poor and not bothered to bring back cars. There are new additional red-tape forms at Westport which makes individual student AP-imports not worth it anymore. Seriously not worth it. AP import agents will buy it off and make sure to find a car that can make at leas RM80k profit, if not its not worth it to bring it back. That is why C-class are CKD and that is why even base conti models are spec-up a lot.
Paul, please make a segment in Driven about leather vs non-leather seats.
I cannot help but imagine a 320i with wheel caps, fabric seats, only 2 airbags, no stability assist, manual side mirrors, drum brakes on backwheels, no iDrive, 5-speed normal gearbox – sold for only RM150k.
People will definitely go for this rather than Civic or Mazda3. The brands speaks louder than specs.
setju. sebab kalau tambah aksesori2 tu di kedai ah beng, masih dpt sebuah kereta premium lebih murah banding camry. accord
although having bare versions of a premium car comes at a cheaper price, not necessary it will get a whole lot of sales because……
1. malaysians like high spec items……i’ve seen quite a number of models where ppl opt for high specs instead of lower ones……..high specs indeed have quite good sales figures eventhough it costs from few K to tens of thousand more….
2. and since u are paying about RM200K lets say….expectations should be high and u would not want an empty BMW or merc or whatever it is.
Im pretty sure the government will spoil such plan if bmw & merc were to implement that tactics…proton will whine customer choose oversea marque over them…=(
But i like such idea as what BMW n Merc did. We, Malaysian want a premium car at affordable price! =)
agree
I feel for luxury cars, malaysians always go for the top of the range, kiasu mah! That’s why most car distributors here sell top of the range models.
Premium car how can without leather seats?
BMW & Merc stumbled onto “How to sell to the Indian upper middle class” with this idea.
It wasnt too long ago that only the super rich Indians can afford to shop in London/Paris/NY. Anything bought from overseas were seen as fashionable. Today, middle class Indians can afford to buy imported luxuries (just like China’s middle class) & owing a BMW or Merc is a status symbol. I suppose the same can be said in M’sia.
A strip down version will work here in M’sia. We, just like the Indians & Chinese, like to show off our status & (perceived) wealth. Gaya mesti ada.
Cost of ownership would be revised. Yep, they will increase their qty, although at the expense of EBIT.
But BMW had the Mini One as an alternative to the std MINI and the X1. How effective that was, would be the basis of BMW’s moves.
I could see VW going down this route, if they are finished with daydreaming. If VW or even Lexus capture a sizeable market share, only then would the other two follow suit. Otherwise, why should they?
haha,is this a joke?
well,at least they are trying and that is a really good strategy for BMW and merc too increase their sales and hey..what happen to vw,i heard they also planning to do the same thing?
yaya.. this is malaysia.. i don think they will allow it.. it definitely is going to affect P n P’s profit… and some more recently.. P n P is gaining improvement in sales… sure will want to protect their sales and profits…
When buyers move up from Camry and Accord to the German makes, they expect something better than their previous Japanese cars. So the bare basic car may not work here.
premiums must be premiums..stripping out specs will cause a premium to be as normal as other car..it could work in india,because f the naturality of the market..but in malaysia if the tax structure is revised everything will be solved from pricing of vehicle to insurance coverage..and a premium can stay as premium as we need..
definitely there will not be stripped down version of these 2….the rich wont allow it…over their dead body…ahahha…
so.. in other words, in europe it is the ‘taxi-spec’ edition… pared down to the minimum… even merc & bmw in europe got manual option for those base edition…
but dont throw away the airbags… we really really need them!!!
so can MB or BMW Msia drop the price to below RM200k for the “taxi-spec” 320d or C200K??
come to think of it…
can I get an auto 320d with:
– no electric seats
– no power windows
– no leather interior
– basic CD player
– no xenons
– no alloys (come with steel rims)
– no reverse sensor
– no iDrive
– no rain sensor
– no trip computer
– basic aircon (not 4 zone climate control)
– no run flat tyres
– no LED lights
– what else can I get rid off?
i would even specify a manual but then i need to pray for no traffic jam in KL… which is very very unlikely to happen…
SEDIH lah bro, here we cannot get new BMW with manual trans….. :(
sell cheaper e90 320d…
– no electric seats
– no pdc
– no i drive
– manual ( please comewith manual like in e30,e34 era )
– no rear blinds
– comes with m sport trim :D ( blackened with silver stripe )
– no sports wheel
– no asc
– no radio
priced @ 150k…it will sell like goreng pisang
I absolutely agree with you bazet…. just like in older days when cars were more simple and not as complicated as today….. E90 will just be as nice as E30 back in the 80s… and yes….BMW must come with a manual transmission….. esp in 3-Series….
yup 150 k. lingkup la itu Camry, Accord dan Mazda 6
Are the cars sold here already barebones as it is, especially the 320, i can’t imagine it getting any less…
maybe if they took out the aircond and radio…
The cars sold here already bare bones as it is, especially the 320, i can’t imagine it getting any less…
maybe if they took out the aircond and radio…
Aricon is RM 10k Option, Radio must come with iDrive, 20k option. LOL.
I suppose it has to do with branding in Malaysia.
Cars mean alot to malaysians. I can be cruel and say they’re ‘compensating’, but I think it goes further than that. Since living abroad I’ve noticed that cars are simply not status symbols like they are in malaysia. People with pretty decent incomes would never even consider spending twice their annual wage on a car.
They simply arent status symbols (ok, high end ones are, like the CLK or 7 series) like they are in malaysia, where many people aspire to own ‘luxury’ cars.
It is also worthwhile to note that as mentioned, baseline prices do seem significantly cheaper than the spec’ed up premium versions available in malaysia. Compare similarly spec’ed versions abroad and in malaysia, despite all the high tax people are screaming about, the difference really isnt all that great, 30-35% after all OTR costs considered for most cars anyway…and keep in mind Malaysia’s income tax is relatively very low and fuel is unnaturally cheap.
Are you sure our income tax is low? Think twice before saying our income tax and taxes are low…. 27% is low????? You must be either earning so much that you can leave off the 70% or you have not experience paying taxes..
Plus an additional coming soon GST?
Cost of living in Malaysia is really very high.. Considering Malaysian income level.
I would say we either need to increase our income by 3 fold or we need a change in our govt structure.
Are you sure our income tax is high? Think twice before saying our income tax and taxes are high…. 27% is very very low.
developed countries ppl can pay up to 50-60% of their income.
Top income tax bracket for ppl working in the UK is 45%.
Go and find a lower tax bracket than 27% I challenge you.
Cost of living is high because everyone wants a merc but doesnt want to work for it. If people actually realise that not everyone in the UK or US drives a merc or bmw, than you’d realise that we all are a bunch of materialistic people who want everything but cant get it so we whine a lot. Come on, give me a break.
Guess you boys have not really done your homework….
Btw, we get taxed on cars, properties, land, health care, etc..
Maybe its time Malaysian really start to calculate what is the actual taxes we are paying.
Oh.. by the way when our british friends pays 45%.. It depends also whether are they single, own a property, any kids, parents etc..
The tax braket drops the moment they are eligible for it..
Yes.. not forgetting their currency is also very big, buying power is strong..
The other reason is also those paying taxes are paying for older folks which are retired.The govt takes care of their citizen when they are older…
Health care is also world class!
Maybe some of you guys can sum up what is our actual tax we are paying?
Well…….. provided you are even paying for it??
agree with you. kita bayar cukai yg kita tak sedar lebih banyak daripada cukai pendapatan. Cukai kereta, cukai yg diserap dalam cukai korporat. dlm setiap barang yg kita beli dah ada dah dimasukkan oleh sykt2 tersebut. cuma kita jer x sedar. Juga kena tengok jugak gaji seorang juritera Malaysia dgn gaji seorang jurutera US atau UK.
Sbg contoh harga ayam hanya Euro 3.50 seekor di German misalnya. Gaji minimum katakan Euro 1000. Saya rasa lebh ringgi. banding di Malaysia RM 1000 gaji sebulan, harga ayam seekor dah mahal. so sapa lg untung. Apapun saya lebih suka tinggal di Malaysia sbb ni negara saya.
Ian,
Don’t have to look to far…
Just compare with Singapore,Brunei and Thailand will do….
Ian in a welll…
Sorry, I meant frog in a well.
Aiya. nothing new lah. last time P1 also offer customer to choose accessories …
u can book a Wira with no sports rims, no radio, no power windows etc etc.
The sales man says.. no stocks. have to wait 1 year lah.
I remember that. LOL
how about option to buy bmw with stuff from p1 or p2?… like seat from persona, steering wheel from savvy, sport rim from neo, electronics from saga.. i think that will help reduce the price since most stuffs are produced locally… bmw can claim fund under NAP from gov also since more local parts.
Yes..it will work in Malaysia. Maybe can also discard ABS, EBD, only 1 Airbag and call it 3series BSX=Basic.
No, 3 series ‘Me’ (Malaysian Edition)
BMW won’t compromise on the safety aspect la… not like proton! I owned a “basic” 316i e46 in the UK while i was there. Comes with a slightly detuned M43 1.9L engine, cloth seats no leathers, 5 speed manual, no reverse sensors, no sunroof, rear windows was manual, BUT it still had 6 airbags, ABS and traction control…..
Just to add a bit more…. it had no multi-function steering wheel either… but mine had 17″ m-sports wheels which the previous onwers put on la :-). It was dirt cheap there, but still provided me with quality, safe, realiable motoring with a touch of class…
Aint that car nice, simple and cheerful…. and of course…safe a well…. :)
Of course it will sell! Just look at how many Vios J Spec on the road!!!
BMW with a two airbags?
LOL….
that is just plain INSANE!!
however steel rims, manual, fabric seats, no IDrive, normal CD changer, feels normal..
do you guys remember the 1 series with the 1.6 litre engine with manual transmission and fabric seats… did bmw stop selling it?
My goodness… drivers nowadays. Reverse sensor also essential?
Dah tentu lah. Do you think drivers nowadays* can drive without reverse sensors, ABS, EBD, BA, Stability assist, auto transmissions and power steering?
* Myself included.
Many get kopi-lesen nowadays.
See the kind of drivers out there that weaves in & out of traffic, lane change dangerously, speeding in the slow lane, driving slow in the fast lane, using emergency blinkers while driving in heavy rain, not moving aside after an accident, haphazard parking, does not know how to reverse park, tailgating (anyone care to add some more)
Unfortunately my driving friends, the auto industry in BolehLand is dictated by Politics and not by good corporate strategic planning. Hence NAP ver 2.0 and all this mombo-jumbo is just fairy tales.