Mercedes-Benz India has increased its investment by Rs 400 crore, to boost local assembling in the country, taking the total investment value to Rs 2,600 crore. Much of the fresh Rs 400 crore investment has gone into retooling of the automaker’s plant and production lines.
With the largest share in the Indian luxury car market, Mercedes-Benz aims to scale up the local mass assembling of its high-performance AMG models. This will give the German luxury car manufacturer significant cost advantage compared to the completely built unit (CBU) units that draw a hefty amount of import duty resulting in significant hike in final price.
Presently, Mercedes-Benz India assembles 11 cars in India, at its Chakan plant near Pune, which is expected to go up in coming days.
The automaker has just launched Mercedes-AMG GLC 43 4MATIC Coupe in India at Rs 76.70 lakh (ex-showroom). The Mercedes-AMG GLC 43 Coupe facelift is the first AMG model to be assembled in India and this also marks the 10th launch of the automaker in CY2020.
As Mercedes-Benz previously claimed, the locally assembled AMG models will be 20% cheaper compared to the CBU models. As it also says the decision of investing Rs 400 crore more has been taken depending on the potential of the vehicle to do well in Indian market. Also, with this investment, Mercedes-Benz India will be producing new generation cars, sedans, SUVs and AMG performance cars in one facility.
Prior to the launch of the Mercedes-AMG GLC 43 Coupe, Mercedes-Benz India had 8 AMG models on offer for the domestic customers, including 43, 53, 63 and GT series. As the luxury car brand claims, the AMG lineup has registered a 54% YoY growth in sales in CY2019, as compared to CY2018.
Mercedes-Benz India currently can roll out 20,000 cars annually. In 2019, the German carmaker sold more than 13,000 models in India, attributing to one-third of the market share in the sub-40,000 luxury car segment.
During January-September 2020 period, Mercedes-Benz sold 5,0007 cars across India and then the sales were hit by the Coronavirus pandemic, lockdown etc. According to the ratings and research agency ICRA’s estimates, the luxury car segment in India is likely to register a 40% decline in sales in 2020 to about 21,000 units.
Banking on the month-on-month sales growth, India’s largest luxury car manufacturer, Mercedes-Benz hopes the luxury car market of the country will be back to the pre-Covid levels in the current quarter (October-December) of 2020. As the automaker said, the strong month-on-month growth in demand for luxury cars along with the double-digit growth in the Q3 of 2020 indicates a silver line for the segment.
During the launch of the Mercedes-AMG GLC 43 Coupe, Martin Schwenk, MD of Mercedes-Benz India, said the company first needs to regain 2019 levels and then it can be confident of an increased offtake of luxury cars, especially ones manufactured locally. Meanwhile, another German luxury carmaker Audi says the Coronavirus pandemic has hit the Indian luxury car market hard and pushed it back by 5-7 years. It also claims that the Indian luxury car market will take at last 2-3 years to reach the levels of 2014-2015.