Instead it will continue to push stretched versions of its top-end saloons and larger SUVs.
"Our top down model strategy has been successful in India so far. We have successfully sold the top end A8 stretched sedan and other high end models to Indian customers," Michael Perschke told the Economic Times.
"But we have no plans to dilute our brand by launching smaller cars like the A1 or similar models, even as the competition garners volumes with such offerings."
This is in sharp contrast to BMW which has already launched its MINI brand and plans to introduce the compact 1 Series next year. Mercedes-Benz, already selling the B Class, will launch the A Class in 2013.
In the first seven months of this financial year, BMW and Audi sold 5,174 cars in India and Mercedes-Benz 3,651, according to the Economic Times.
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