Make in India: Mercedes Benz doubles India production capacity to 20k units.

Mercedes Benz doubled its India assembly capacity to 20,000 units annually, also making India one of the first market to make the GLA entry SUV outside of Germany.

The company, which has seen a 40% growth in sales this year, has been expanding its local assembly capacity as volumes are on an overdrive on the back of new model launches and expansion of sales network.

'India is one of the focus markets for Mercedes Benz globally, and with the addition of a new plant, we are getting future ready,' company India MD & CEO Eberhard Kern told TOI.

The plant was inaugurated by Maharashtra chief minister Devendra Fadnavis and Union environment minister Prakash Javadekar.

With the addition of the GLA SUV to the assembly line, the company now makes six models locally which include C-, E-, S-Class sedans and the ML- and GL-Class SUVs.

The CLA entry sedan will be added to the local assembly list later this year while the A- and B-Class models come in thereafter.

The market for luxury cars had been under pressure for the last two years as the Indian economy was passing through challenging times. However, a pick-up in economic activity and entry of newer models is adding buoyancy to demand.

Kern said luxury car sales in India are expected to go up to nearly 40,000 units this year against the 33,000 units sold last year. Around 32,000 units were sold in 2013.

Mercedes Benz has been leading the pack in the luxury market as it edged past Audi in the first quarter of this year (Jan-March'15), selling 3,566 cars against the 3,181 cars sold by its close rival. Compatriot BMW has been going through difficult times and is a distant third, followed by brands such as Jaguar and Rover (JLR) and Volvo.

Kern said that the company's SUV portfolio of GL- and ML-Class models has added to the demand as also the new-generation of cars such as A-, B-, CLA- and GLA-Class. 'The new generation cars now account for nearly 30% of our volumes as these are able to attract first-timers to the luxury segment.'

The local production of GLA SUV will also see the model's price come down by between Rs 1.5 lakh and Rs 2.5 lakh. The model is currently available for Rs 32.75-36.9 lakh (ex-showroom Delhi).

Luxury makers have been complaining about the high import duty on cars in India which goes up to as much as 170% for fully-built models. Companies say that a reduction in the duty will enable them to sell more vehicles in India as the cars will come in cheaper.

Mercedes is also boosting its brand presence and will take up its retail outlets to 80 stores by the end of this year, adding 15 new dealers. The company had sold 10,201 cars last year, a shade lower to 10,851 units sold by Audi.

TOI