German luxury car maker Mercedes-Benz will double the capacity of its Chakan unit , near Pune, to 20,000 units per annum by the end of calendar 2013. The expansion will entail an investment of Rs. 250 crore.

Addressing reporters after the launch of the new compact luxury car, the A-Class, Eberhard Kern, Managing Director & CEO, Mercedes-Benz India Ltd. (MBIL), said the company would decide the models and their timeline for production from the facility next year.

MBIL currently makes the S-Class, E-Class, C-Class, and ML-Class cars at Chakan. In August, it plans to launch the GL Class from this facility. It imports and sells cars such as CLS-Class, SLK-Class, SL-Class, E-Class Coupe, E-Class Cabriolet, R-Class, luxury Tourer B-Class, among others.

A-Class to drive volumes

The new A Class, which made its global debut in September 2012, is being launched here in both petrol and diesel variants – A 180 Sport and A 180 CDI Style. The A 180 Sport is priced at Rs. 22.735 lakh, while the A180 CDI Style with a 2.2 litre engine is priced at Rs. 21.935 lakh (ex-showroom Mumbai).

“It is a pioneer in the compact luxury car segment here as this segment does not exist in India. The diesel variant is cheaper than the petrol because of features like a panoramic sunroof in the petrol variant,” he said.

The Germany-made A class is imported as a completely built unit (CBU). Mr. Kern said the A Class and B Class would be volume drivers in the future for MBIL. Competitors such as BMW, Volvo and Audi have announced plans to launch their luxury compact cars in India.

MBIL sales grew 5.3 per cent in the January-March 2013 quarter and Mr. Kern expects double digit sales growth this year on the back of new products being launched, including the B-Class diesel variant in a few weeks, and the new S-Class later this year. The company has 57 dealers and plans to appoint 10 more this calendar year.

Mr. Kern expected MBIL’s smaller cars such as the A-Class, B-Class, CLA and GLA to garner a 40 per cent share of MBIL’s business by 2020 with the remaining coming from sedans and SUVs.

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