Mercedes-Benz to increase Indian investment

Mercedes-Benz will increase their investment in India. India is one of the best emerging car markets in the world. Their luxury segment is growing fast with sales growing fast.

Currently Mercedes-Benz has 31 showrooms and 41 service outlets across 31 cities. They began operations in the country back in 1994. The German auto giant is currently the number two luxury car supplier in the country.

Part of the company’s investment will go towards a highly anticipated advanced paint shop. This will be completed by October and will contain an annual capacity of 20,000.

Mercedes-Benz India recently opened a showroom in Lucknow which is the first dealership in the Uttar Pradesh region. It is these types of cities that Mercedes-Benz is targeting at the moment, with BMW and Audi already having a strong foothold in those areas. Other new dealerships include ones in Indore and Karnal.

As part of their growth strategy, Mercedes-Benz has built some of their vehicles locally. Pricing is all important in India, more so than most markets. In order to bring the price down, the Mercedes-Benz C-Class, E-Class and S-Class have been built in the country.

Peter T Honegg, the Managing Director and CEO of Mercedes-Benz India said “We are bullish about the Indian market and this is reflected in our long term commitment towards the dynamic Indian market. The investment of Rs.850 crores will help us strengthen our production and operational capabilities with regards to our existing products and our exciting and aggressive product offensive which we are readying for the Indian market,”

Sales of Mercedes-Benz cars have decreased by 24 per cent down to 1,633 units for April and July. That figure was a brilliant 2,141 during the same month in 2011.

Mr Honegg has stated just what a terrible impact the rupee has had on Mercedes-Benz. The company has been forced to cut costs wherever possible. That includes staff flying economy class and staying in cheaper hotels.

The current fortunes of BMW and Audi have been fairing in the complete opposite manner. Their SUV demand has seen a great increase. The Indian market seems to be in love with the Audi Q5, Q7 and the BMW X3 and X5. In order to counter, Mercedes-Benz is planning to release a new SUV in the near future in India.

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