German luxury automaker Mercedes-Benz, the third largest in the world in the segment has revealed new plans to lift production output in India in a bid to lower retail prices and increase its local market share.
The Indian luxury auto market has become an intense battlefield as its larger two rivals – Audi and BMW – have also upped the game in India, even as Daimler Ag’s Mercedes-Benz was the first among the trio to enter the Indian auto market twenty years ago. The brand was outperformed by its competitors in terms of sales, with India’s luxury auto market currently led by Audi. The German automaker has now announced it would double its production output capacity to 20,000 units annually, with a higher mix of locally assembled models and locally produced spare parts – in a drive to lift profits and grow sales in what is today the planet’s sixth-largest auto market.
Present at the opening ceremony of a new production location in the western Indian city of Pune, near Mumbai, on Thursday, India unit Managing Director Eberhard Kern said: “It is a full-fledged strategy of how to develop the brand of Mercedes-Benz in India, and it’s far from done. With local production we have more availability, are closer to the market, and it gives us the chance to make it even more attractive for our customers with prices coming down.” Industry observers also point out that building more products and increasing the tally of locally sourced parts will allow Mercedes big savings by skimping on the high import taxes.