NEW DELHI: In a big step-up for the Indian luxury car market, Mercedes-Benz is looking to double installed capacity at its India factory to 40,000 cars per annum as the German giant charts out a strategy to maintain its lead in the country by launching new cars and expanding its footprint.
The move, which is in early stages right now, will see the company expand annual installed capacity at its factory – located outside Pune – from the existing 20,000 units. This will be the first major exercise undertaken by a top luxury carmaker to expand its base and investments in India as demand for expensive cars starts to rise faster than the broader market.
Santosh Iyer, MD & CEO of Mercedes-Benz in India, told TOI that the company has started the process to “identify and look at” future expansion needs as sales move towards its peak capacity. “While we are fully focused on 2024 right now, we will need to expand if the existing growth rates continue,” he said, as the company announced sales of 17,408 units for 2023 at a growth of 10% over the 15,822 units sold in the previous year.
The company, which is completing three decades in India, remains bullish on the luxury market that hit record highs of about 47,000 units last year and shows no signs of weakness.
It plans to launch over a dozen new cars in 2024 – including three electrics – and will invest over Rs 200 crore towards manufacturing operations, new product startups, digitisation.
The Pune factory is built on a 100-acre plot, and Iyer said any new capacity expansion would happen at the same location. “We will see how this year goes and only then take a call on doubling capacity.” Iyer said the Indian market is showing signs of sustained robust demand, especially as the average selling price of its vehicles has gone up from Rs 57 lakh in 2018 to Rs 88 lakh last year. “This is not aspirational consumption, but true luxury consumption. We are very much focused at the top-end of the luxury market.”
The move, which is in early stages right now, will see the company expand annual installed capacity at its factory – located outside Pune – from the existing 20,000 units. This will be the first major exercise undertaken by a top luxury carmaker to expand its base and investments in India as demand for expensive cars starts to rise faster than the broader market.
Santosh Iyer, MD & CEO of Mercedes-Benz in India, told TOI that the company has started the process to “identify and look at” future expansion needs as sales move towards its peak capacity. “While we are fully focused on 2024 right now, we will need to expand if the existing growth rates continue,” he said, as the company announced sales of 17,408 units for 2023 at a growth of 10% over the 15,822 units sold in the previous year.
The company, which is completing three decades in India, remains bullish on the luxury market that hit record highs of about 47,000 units last year and shows no signs of weakness.
It plans to launch over a dozen new cars in 2024 – including three electrics – and will invest over Rs 200 crore towards manufacturing operations, new product startups, digitisation.
The Pune factory is built on a 100-acre plot, and Iyer said any new capacity expansion would happen at the same location. “We will see how this year goes and only then take a call on doubling capacity.” Iyer said the Indian market is showing signs of sustained robust demand, especially as the average selling price of its vehicles has gone up from Rs 57 lakh in 2018 to Rs 88 lakh last year. “This is not aspirational consumption, but true luxury consumption. We are very much focused at the top-end of the luxury market.”