Merc invests Rs 400cr in India to localize models
PUNE: Luxury carmaker Mercedes-Benz India has increased its investment in the country by about Rs400 crore over a few months, taking the total investment to Rs2,600 crore.
Much of its fresh investment has gone into new tooling and production lines as the company increases its portfolio of locally manufactured cars.
Mercedes-Benz has now started local mass production of its AMG model, which will give it a significant cost advantage over imported models. The company now manufactures 11 models in India.
“The decision to localize a model is taken based on the potential of the vehicle to do well in a particular market,” CEO and managing director Martin Schwenk told TOI.
The local manufacturing of the AMG model brings down its cost by over 20%. “With this, Mercedes-Benz India will be producing new generation cars, sedans, SUVs and now the AMG performance cars in one facility,” the company said in a statement.
The automaker has the capacity to manufacture 20,000 units annually. In 2019, the company sold over 13,000 luxury cars in the country — giving it a third of the market share in the sub-40,000 luxury car segment.
In the first nine months of 2020, the carmaker sold just 5,007 cars as automakers across segments suffered during the pandemic.
Schwenk believes localization of models increases the potential to do well as costs drop for the end-user. “We have to first regain 2019 levels and then we can be confident of an increased offtake of luxury cars, especially ones manufactured locally” he said.