Investing In India

Its vast market potential lures foreign companies. But many have been tripped up by local consumers and rivals. Here are some lessons

It looked like a can't-lose proposition. In 1995, Mercedes-Benz opened a plant in India to manufacture its E-class sedan and win over India's new rich business class. Two years later, the plant is using only 10% of its 20,000-car capacity. Indians turned up their noses at the sedan--a model older than those sold in Europe. Now, Mercedes has to reassess its mistakes and start exporting excess cars to Africa and elsewhere.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.