New Delhi: DaimlerChrysler AG, the world’s second-largest luxury-car maker, will invest $67 million (Rs275 crore) to build a factory in India, where an expanding economy and rising disposable incomes have spawned a set of high-spending customers.
The factory, to be located at Chakan in Maharashtra, will employ about 350 people initially, Joachim Schmidt, chairman of DaimlerChrysler India Pvt. Ltd, said on Wednesday at a conference in Pune.
“We see this factory as a chance to use India’s market potential, which, for us, is great,” Schmidt said. “We see double-digit growth in luxury car sales in the next couple of years and that’s why we’ve invested here.”
Luxury-car makers such as Bayerische Motoren Werke AG (BMW AG) and Volkswagen AG’s Audi unit have either opened factories or dealerships to sell their cars in India as economic growth increases the number of millionaires.
Auto makers last year announced a combined $5 billion of investments in new factories in India by 2012.
DaimlerChrysler currently assembles the E-Class, C-Class and S-Class models at a factory in Pune. The land for the existing factory is owned by Tata Motors Ltd, India’s biggest truck and bus maker.
After construction of the factory, the company will shift all its existing operations to the new location.
Volkswagen had in November said it will spend €410 million (Rs2,296 crore) to set up a factory in Maharashtra to make the Passat and other models. Its affiliate Audi AG will begin building the A6 sedan in India this year.
BMW AG, the world’s biggest luxury-car maker, had in March opened its first factory in India to assemble the 3-Series and the 5-Series models in Chennai. The plant has a capacity of 1,700 units a year.
DaimlerChrysler sold 2,121 cars in India in 2006, 11% more than a year earlier, the company had said in a 2 January statement.
The new factory in the Chakan area in Pune will be located on a plot of 100 acres, triple the area of the existing unit. One-third of the land will be used for the new facility and the remainder will be kept for expansion.