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The liberalisation of the Indian market and its impressive GDP growth rates led Mercedes-Benz AG (MB) to enter the Indian market in 1994. The prime enabler for the entry was the huge potential in the local market as perceived by MB. Since luxury cars were primarily being imported and hence subjected to the heavy import duties, MB saw an advantage to start off by assembling imported CKD / SKD (Completely knocked down / Semi knocked down) units, which meant they were subjected to lower rates of duties. It however, did not work out as planned. Mercedes-Benz India limited (MBIL) could sell only 2,000 cars against its target of 20,000. The low sales volume coupled with high fixed costs associated with the maintenance of exclusive vendors meant huge losses for MBIL. As a result, the accumulated losses of MBIL were more than half of its equity capital by 1999. This meant that it had to report to the Board for Industrial and Financial Reconstruction, which monitors sickness in Indian industry. The same year Mr Ziegler was appointed CEO for the Indian subsidiary with the mission to turn it around.