Mercedes-Benz is planning to increase installed capacity at its India facility to 40,000 cars annually as part of a strategy to maintain its lead in the nation by introducing new models and growing its footprint. This is a significant step up for the Indian luxury automobile industry. The company is currently in the early stages of this transfer, which will increase the factory’s yearly installed capacity from the current 20,000 units at its location outside of Pune.
Mercedes-Benz is planning to increase installed capacity at its India facility to 40,000 cars annually as part of a strategy to maintain its lead in the nation by launching new cars and growing its footprint. This is a significant step up for the Indian luxury automobile industry.
The company is currently in the early stages of this endeavor which will increase the 20,000 units of annual installed capacity at its manufacturing outside of Pune. A leading luxury carmaker’s first significant attempt to increase its presence and investments in India comes as the demand for high-end vehicles begins to grow more quickly than the overall market.
As sales approach their peak capacity, Santosh Iyer, MD & CEO of Mercedes-Benz in India, told TOI that the business has begun the process to “identify and look at” future expansion needs. The company announced sales of 17,408 units for 2023, a 10% increase over the 15,822 units sold the year before. “While we are fully focused on 2024 right now, we will need to expand if the existing growth rates continue,” he said.
The company, which is nearing the end of its third decade in India, is still optimistic about the luxury market, which reached all-time highs of over 47,000 units last year and is showing no signs of abating.
It intends to introduce more than a dozen new vehicles in 2024, three of which will be electric vehicles, and it will allocate more than INR 200 crore to new product development and manufacturing. Santosh Iyer, MD & CEO, Mercedes Benz India All Comments startups, digitization.
The Pune plant has a 100-acre site, and Iyer stated that any future capacity growth would take place there. Iyer stated that the Indian market is exhibiting signals of continuing solid demand, particularly given that the average selling price of its vehicles has increased from INR 57 lakh in 2018 to INR 88 lakh last year. “This is real luxury consumption, not aspirational consumption. Our primary concentration is on the upper echelons of the luxury market.”