German automotive major Mercedes Benz is closely watching rupee depreciation versus the dollar and euro as it is likely to impact the overall cost of cars sold in India.
“The rupee has depreciated by about 10 per cent in the last month alone. This is quite concerning. For a manufacturer having a big import content in its cars sold in India, it has a big impact,” Eberhard H. Kern, Managing Director, Mercedes-Benz India, said.
“As a corporate, we have a global hedging policy in place. But there is a threshold for such hedging. The rupee fall has been quite big in recent times. It is not sustainable. Soon we will have to take a call on the need for hiking prices,” he said.
Addressing presspersons here today after launching their new E Class in Hyderabad, he said rupee volatility would also impact other car manufacturers who have import content.
Referring to the Free Trade Agreement and its impact on the automotive sector, he said discussions have been on for some time and it is not clear what shape this would take. “Whether it impacts the auto sector or not we are prepared for any changes that this could bring to the sector,” he said.
The company has invested nearly Rs 850 crore in India and is in the process of doubling its capacity from 10,000 cars per annum to 20,000 cars per annum with an outlay of Rs 250 crore during the year.
“We have launched several cars during the year so far including AMG, A Class, GL and E Class cars. Soon we will have one more launch. This has been a year of aggression for us and we expect to sustain the growth with new models,” he said.
The company sold about 7,138 cars last year and expects double digit growth during the current year.
The E Class has been one of the most successful models in India with more than 23,000 vehicles on the road, he said. The response to recently launched models has been good. About 100 GLs were sold out and more than 400 A Class cars have been booked within 10 days. The wait list could go up to six months.
The company thrust is on bringing down the overall total cost of ownership, he said.