Mercedes-Benz plans to triple its Indian production capacity by 2015-16 to 30,000 units per annum (upa) and to 100,000 upa by 2020, reports the Hindustan Times. "We already started manufacturing M Class in India. We will build B Class and then A Class in India… There will be a new SUV [sport utility vehicle] on A Class platform by 2014-15. We will be fully loaded when GLK will be in our portfolio by 2015-16. Given all these plans we will need 30,000 production capacity," said Peter Honegg, Managing Director of Mercedes-Benz India.
Significance: Mercedes-Benz currently has the capacity to assemble 10,000 cars a year in India, and the planned production expansion comes on the heels of strong demand expected in the luxury car segment. Honegg expects India to be the second largest car market with 11 million cars, and the size of the luxury market will be about 400,000–500,000 upa by around 2020. Additionally, Mercedes-Benz India is heavily cutting down expenditure and absorbing cost escalation to keep cars affordable for customers, in response to rupee depreciation and falling demand. Sales fell nearly 24% year-on-year (y/y) to 1,633 units during April–July 2012, compared with 2,141 units sold in the year-ago period. The depreciation of the rupee against major global currencies, coupled with a slowdown in the Indian market, is forcing global automakers to delay car launches in the country—Volkswagen, Ford, and Fiat have all postponed their small-car launches by six months to a year in India.
