Mercedes-Benz is expected to build its second and third car production lines at its plant near Pune and invest about Rs 350 crore as it looks to regain the number one luxury carmaker spot in India from BMW in about two years.
Local assembly of 4-5 models are under works, helping it rapidly gain volumes by avoiding the high domestic import duties on fully-built cars. Additionally, extended wheelbase variants of the C and E class sedans are also being considered for India.
Of this, two will be new models and both compact cars — B-Class launch is later this year and A-Class rollout is due for early 2013. The other two sports utility vehicles (SUVs), the M-Class and the GL-Class, are already part of the domestic portfolio. A fifth model, a small SUV ‘GLC' is likely to come by 2014.
Important market
“India is an important growth market for us, where we see quite some potential for the future. In order to tap this potential we will be continuously expanding our presence in this key market. This will happen, for example, by enlarging our dealer network, but also by ramping up production capacities accordingly,” Mr Dieter Zetsche, Chairman of the Board of Management, Daimler AG and Head, Mercedes-Benz Cars Division said.
Added Mr Matthias Luhrs, Chairman of the India Board and Vice-President for Global Sales: “In terms of sheer volumes, it is important to start with local production for the A and B Class. We hope to double our volumes with these models (to over 15,000 units).”
He added that a mid-term plan for India is ready, with a Board approval expected in the next few months.
Strategy
The strategy for the German luxury carmaker is to head towards almost full production in the country — a paint shop has been set up on an around Rs 200 crore investment, while the engines are already assembled locally under contract by Force Motors. Right now there are two assembly lines at the Chakan plant, one for cars (C, E and S-Class assembly) and another for commercial vehicles.
The plan is to take up investment to Rs 1,000 crore on the car side by 2014-15 (from Rs 650 crore), sources said.
Global leader
Mercedes-Benz aims to be the top luxury car brand worldwide by 2020 on the back of a stream of new models it has planned and growth in markets such as China and India. A leader in the C and S-Class segments, the brand sold 1.38 million units globally in 2011 (eight per cent higher).
Parent firm Daimler AG posted 29 per cent higher profits (€6 billion) in 2011, with revenues going up nine per cent (€106 billion).