Mercedes-Benz India Ltd. (MBIL) is currently in the process of consolidating its operations in the country. The year 2015 has witnessed a product offensive and a capacity expansion at the Chakan plant so far.
The German luxury car maker has invested around INR 1,000 cr in its Chakan plant which now has an installed production capacity of 20,000 units per annum. Moving forward, the automaker is poised to expand its local manufacturing by increasing the localization level and number of models produced at Chakan but this move would require support form the government of Maharashtra in terms of tax concessions.
The company is also looking to start exports from India. Speaking to Economic Times, the newly appointed MD and CEO Roland Folger said that the Indian subsidiary has the production capacity to cater to international markets but there has to be free trade agreements between India and export markets to make it financially viable.
MBIL currently has 4 local vendors who supply engine, gearbox, axle, flooring, cockpit and wiring harness. The top official reveals that the firm is looking for more local vendors who can be competitive at the same time can be a global supplier as well so that benefits of economies of scales can be realized.
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MBIL managed to sell 10,079 units from January to September 2015 which is a 34% increase compared to the same period previous year. The brand is expecting double digit growth in the coming year as well. Expanding the local manufacturing and commencing exports would be crucial for the next phase growth.