Mercedes Benz to double India plant capacity

Mercedes Benz to double India plant capacity

Mumbai: Mercedes Benz India Pvt Ltd, the local arm of Daimler AG plans to step up investment, increase capacity and headcount at its India operations as luxury car sales surge on back of increasing number of millionaires in the country. The company plans to invest Rs350 crore at its Chakan plant.

In a phone interview from Pune, Wilfried Aulbur, managing director and chief executive at Mercedes Benz the invetsment outlined will be used in setting up a new paintshop facility and capacity enhancement. The company also plans to double the headcount in India to 1,400, said Aulbur. The company is adding a second production shift starting on Wednesday at its Pune facility to double the plant’s capacity to 10,000 vehicles a year.

Daimler, Bayerische Motoren Werke AG and Volkswagen AG’s Audi division are seeking to tap rising demand for premium brands in India, where economic growth and stock market gains spur spending on luxury. In November, BMW India also announced company’s plans of commencing a second shift and increase make additional investment in India. The nation’s market for luxury goods and services is projected to triple to $14.7 billion by 2015, according to an October report by the Confederation of Indian Industry and A.T. Kearney Inc.

Daimler’s passenger vehicle sales in India increased 79% from a year earlier to 3,827 units between April and November, according to data compiled by the Society of Indian Automobile Manufacturers. BMW’s sales rose 72% to 4,031 vehicles in the period, according to the industry group.

Bloomberg contributed to the story.