Luxury car manufacturer Mercedes-Benz, which last week topped the charts to become India’s leading luxury car brand in the first quarter of calendar 2015, has no plans for an India-made car in the near future.
“India is today the world’s seventh largest automobile market and for Mercedes-Benz, it is on the verge of breaking into our top 20 markets,” said Eberhard Kern, Managing Director and CEO, Mercedes-Benz India (MBIL). “And, while we view India as a key focus market, volumes do no justify an India-made car yet.”
Chakan facility MBIL has a multi-product CKD (completely knocked down) assembly facility at Chakan near Pune geared to cater to the domestic market. “A part-by-part production here is feasible only if we have the volumes to justify it,” Mr. Kern said, adding, “we would have to see how to take this forward but it is more for the long term.” Last week, MBIL sales grew 40 per cent in the first quarter of calendar 2015 at 3,566 units, beating German rival Audi to become India’s leading luxury car brand. “The sales figures are encouraging but this is just the beginning of a period when we will probably be a very strong player.”
The Chakan unit, where the company invested up to Rs.1,000 crore, has doubled annual capacity to 20,000 units. It assembles nine models, which are at different levels of localisation, but the company expects a gradual increase in localisation.
At a mere 1.3 per cent of India’s 2.4 million unit annual automobile market, the luxury car segment is very small when compared to the global average of 10 per cent of automobile sales.
For luxury car sales to pick up, Mr. Kern believed, a reasonable tax and duty structure was needed.
