Pune: German auto maker Daimler AG , the maker of Mercedes-Benz cars, said that the company expects the economic environment in India to worsen in the next couple of years.

The company, however, remains bullish on the Indian market in the longer term.

It expects India and China to drive sales growth in the next 10 years as it aims to regain the No. 1 position among makers of luxury automobiles globally by 2020 and in India by 2015-16.

The Stuttgart-based company is planning to build 13 new-generation cars and most of them will be available in India by 2016.

“We see the dampening of the economic cycle for the next two years i.e., 2013 and 2014, but still we see huge potential in the Indian market due to its size in terms of population," said Matthias Luhrs, global vice-president of sales at Mercedes-Benz Cars.

The statement comes after India’s largest car maker Maruti Suzuki India Ltd cut its forecast for the Indian passenger vehicle market by one million units to four million by 2015-16 and said it expects the market to grow at a less than 10% rate for the next three years because of an uncertain political environment.

Mint reported this on Wednesday.

“We do not know what will happen to the political environment after two years," Luhrs said. “Still, India has the potential to become the most important market; but that will be in the next 5-10 years from now. Globally, we are developing 13 new-generation cars, which will not have any predecessor, and most of these products will come to India by 2015-16."

The local ranking of luxury car makers has changed this year with Audi India and BMW India Pvt. Ltd emerging as the two top rivals, surpassing Mercedes, which was the first to enter the country.

Of the three German car makers, Volkswagen-owned Audi is the most recent entrant into India.

“Brand equity of the Mercedes-Benz is very much enjoyed and it’s intact," Luhrs said, adding that sales have suffered because of an incomplete product portfolio in the country.

“We don’t have products that our competitors have, but we will have them soon," he said. “The delay was due to the reasons at the headquarters. In hindsight, it might be a mistake not to bring small cars to India. But now India is on the map for new products."

Luhrs expects the contribution of the Indian market to his company’s global sales to grow seven-eight fold in a decade. Globally, it plans to sell more than two million cars by 2020, Luhrs said.

Mercedes-Benz India’s new managing director and chief executive Eberhard H. Kern said the company will sell fewer cars in the country this year, compared with 2011 when it sold 7,430 units.

“We might be slightly below last year," Kern said.

The company had last seen a decline in yearly volumes in 2009 when it sold 3,250 units, compared with the 3,625 units sold in 2008.

Kern comes to India from Taiwan and takes over from Peter Honegg, who is moving to the company’s headquarters in Germany.

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