Mercedes Benz has re-established its top position after its German competitor BMW snatched it last year, by the tremendous success of its new creations in the C-class and E-class.

Records from the Society of Indian Automobile Manufacturers shows that Mercedes retail sales in the first quarter of this year i.e. from January to April (except for the month of March which was lead by BMW) exceeded BMW’s at, 1,644 units, as compared to 1,621 units of the latter.

In 2009, the company which boasts of the iconic three-pointed star, headquartered at Stuttgart had to struggle a lot due to adverse effect on sales because of supply of E-class vehicles which fell short of the total demand.

By the year ending of 2009, the company was about to launch the new E-class in India but had to decrease the supply previous-generation model of the car despite of its high demand.

In November 2009, Mercedes introduced the all new E-class at 46.89 lakhs a month after launching the coupe version of the car at 54.83 lakhs. The E-class sedan originates from Benz’s Chakan factory, the coupe comes in as a completely imported unit.

The fight to the top amongst these two companies will hot up further this year predict industry watchers. BMW has already introduced a second shift at its Chennai factory with a view to upscale production. Both BMW and Mercedes remain upbeat about their future launches, and these continue to attract healthy attention from the affluent class. BMW is confident of closing the sales deficit in the coming quarter.

The Munich based BMW has phased out the older 5 series executive sedan model and has introduced a fully new model last week. This car, that takes the Mercedes E-class head on sports a price tag of Rs. 38.9 lakh, cheaper than the E-class, while the top end version will set you back by Rs. 45.9 lakh.

A BMW India spokesperson confirmed that the new 5 series has captured attention and bookings are in full swing. Dispatches are slated to begin sometime in July from when the cars will flow in healthy numbers and are expected to tide over the 4000 units mark this year.

BMW predictions indicate a growth to 11,000 units in the luxury car segment market as compared 9000 units the year before. BMW sold 3,614 cars last year while competition in the form of Mercedes hovered around the 3,247 cars marker.

Peter Kronschnabl, MD, BMW India was delighted to confirm that the company had been recognized as the market leader in the luxury cars market segment and that this goal was realized a year earlier than forecasted. The earlier date set for this landmark achievement was 2010.

BMW will look to further fuel sales with the introduction of the X1, a SUV, sometime later this year. This new addition to the BMW stable, which attracted a lot of eyeballs at the New Delhi Auto Expo, will be rolled out from the Chennai plant and is slated to come with a price tag of about Rs 25 lakh.

Even as economists of the world look towards India optimistically, statistics say that all is not well. The credit outlook for most Indian banks remains negative after the changes made in January earlier this year. Though the fundamental credit outlook was stable, the economic conditions still remain challenging and the number of problem loans or ‘bad’ loans still continues to be on the rise. Of course, the result of all this is an adverse effect on the quality of assets.

It has been estimated that even in the next twelve to eighteen months, things are not going to change for the better. There are no optimistic projections for the next year or two. The public sector banks, which make up the majority of the banking systems and assets, continue to hold a strong front. The concern for the deteriorating asset quality still looms large.