Most Merc EVs in India to be locally assembled in next 5 years
India is the only country outside of Germany where the EQS sedan is locally built.
PremiumStuttgart-based luxury car maker Mercedes Benz’s India arm will locally assemble most of the electric car models it brings to the country in the next 5 years. The company hopes a quarter of its total sales will come from electric vehicles in the next five years, a senior company official told Mint.
Mercedes Benz, India’s largest luxury carmaker by market share, launched assembly operations of its locally built flagship EV, EQS 580, at its factory in Chakan, Pune, over a week ago. Priced at Rs1.55 crore ex-showroom, the car leverages the advantages provided by localization and GST benefits provided for EVs by the government to achieve a cost that’s lower than its internal combustion-engine counterpart, the S-Class. The EQS is Mercedes’s second electric car launch this year, and the fourteenth car the carmaker has localized in India since it started operations in the country.
India is the only country outside of Germany where the EQS sedan is locally built.
The German automaker is also set to bring to India the seven-seater SUV EQB next month as fully built-up units, like the Mercedes-AMG EQS 53 which was launched in August.
While the EQS is the only EV Mercedes Benz plans to localize in India in the near term, it plans to build domestic manufacturing capabilities for most of its electric products in the next three years, as sales volumes grow bigger.
“We will not stop at the EQS. The core question is which model to localize and when? We have not decided that fully. We have plans but they change with what comes from the global product lineup and now, our plans will be influenced by what’s happening in the domestic market itself", Martin Schwenk, Managing Director and Chief Executive Officer, Mercedes Benz told Min.
“What we can clearly say is in the next five years, we’ll sell 25% of our models in electric variants, and to a large extent they will all be built locally. Whether all of them will be made here I’m not sure, but the majority certainly will be. Today we have around 90% local production across our IC-engine range and I would assume we will get to similar levels in our EV portfolio as well. So overall, we will continue localising based on the same parameters we have had in the past -- whether we have enough volume expectation in the year and our outlook on whether it is a viable proposition for us", Schwenk said.
However, going into deeper levels of localization is still distant as volumes remain small, considering the cars are sold in niche segments.
“We start here with an assembly operation on the EQS. There is already a lot of technology which is built into the car and it will go deeper. In the future, we’ll have to consider whether going deeper into localization, such as battery assembly, makes sense. It depends on the volumes which we will have and the technology being used. It would be something to look into in the future, but at this stage, with relatively smaller volumes, it’s too complex to do and there is no benefit in that at this stage for us. We’ll need higher volumes, a bigger range of range of cars when we can perhaps think of setting up some sort of battery assembly factory, but we have not reached that stage yet", he explained.
Schwenk added that every model that is localized in the country comes with the estimate that it can sell at least a couple of hundred units every year for it toe justify the investment of ₹300- ₹500 crore that typically goes into additional tooling.
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