Mercedes seen overtaking Audi to top India's luxury car market

Mercedes-Benz plans to sell more compact cars to tap the fastest growing part of India's premium car market, a move analysts say could help the German automaker overtake rival Audi as the country's top luxury car seller.

Mercedes launched on Wednesday a refreshed version of its entry-level, compact car - the B-Class - and it plans to increase sales of such models by 50 per cent this year.

Compact cars made up a fifth of Mercedes' total sales in 2014.

The share of compact cars in India's luxury market is expected to rise to 50 per cent by 2022 from about 25 per cent now, according Delhi-based Emerging Markets Automotive Advisors.

Part of Daimler AG, Mercedes is closing the gap with Volkswagen-owned Audi. Last year it sold 10,201 cars in India, just 650 fewer than Audi.

"What has helped (Mercedes grow) is the launch of new products at the bottom of the pyramid, and that is where customers are going to enter the segment in the future," said EMMAAA director Deepesh Rathore.

"This is probably the year when Mercedes would be able to overtake Audi", he added.