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Luxury car maker Mercedes-Benz expects to double its capacity in its existing facility in Chakan, near Pune, by early next year. The company is investing Rs 250 crore for the expansion.
Mercedes had recently announced its plans to double the capacity of its facility in Chakan from around 10,000 units per year to 20,000 units per year. The infrastructure is almost ready and the company is awaiting regulatory clearances from the government to complete the process, said Boris Fitz, vice president, sales and network development, Mercedes-Benz India Pvt Ltd.
"The capacity expansion is almost in the final stage. We are expecting some government clearances to be in place and the expansion to be completed early next year," he told reporters in the sidelines of launch of the company's new SUV GLA Class, in Chennai.
"We have already invested Rs 600 crore and are now investing another Rs 250 crore in expansion. This will take our total investments in India to Rs 850 crore, which shows our commitment to the country," he added. He said that the expansion is also in tune with the 'Make In India' campaign by the Prime Minister Narendra Modi and the company fully supports the movement. However, he said that the company still has a few issues with regulations, and is looking forward to the implementation of GST and infrastructure development in terms of roads, power and water supply.
He said that the company is a late entrant into the SUV segment, and it has its own advantage as it helped the company to carve out a strategy. He said that the low quality fuel used in SUVs in India was not usable in its products and the company had to find a way to make it compatible, which took some time. However, this helped the company to carve out a strategy to focus at the luxury segment SUV market in India.
The company is also looking at more young customers buying Mercedes-Benz and the sales of new generation products are growing faster than the overall growth of 16 per cent the company experienced during this year. Chennai has seen more number of young customers buying Mercedes-Benz cars than in many other parts of the country, said Abdul Qadir A Rahman Buhari, managing director of Trans Car India Pvt Ltd, dealer of Mercedes Benz in Chennai.
Fitz added that the company is looking at increasing its focus on used cars, as there is an opportunity opening up in this sector. Warranty and finance are the issues faced in used car sales, apart from sourcing the used Benz. However, the company is also offering exchange offers where the owners of other brand cars could exchange their products with a Mercedes-Benz car, said Buhari.
