Mercedes-Benz India (MBI) formally inaugurated its new manufacturing plant in Chakan near Pune. The new facility, set up with an investment of Rs. 300 crore, and was completed in 13 months which was inaugurated by Maharashtra Chief Minister Mr. Ashok Chavan.
The facility will have a capacity to initially make up to 5,000 passenger cars and 1,200 commercial vehicles (CVs) annually, employing around 500 people. It is spread over 100 acres with independent assembly facility for passenger cars and commercial vehicles. The infrastructure has been created to cater to future expansion needs.
The plant is designed to manufacture the current local-production portfolio of the Mercedes-Benz C, E and S class. It is also flexible enough to accommodate additional production of other models from the company’s range if required by future demand.
MBI Managing Director and CEO Wilfried Aulbur said, “over the years, we have grown — and from the 600 units back in 1999, we sold 3,625 units in 2008 with growth doubling consistently in the last three years. I am convinced that this facility marks the beginning of a new era for the company in India.” Mr. Aulbur said the company was now investing up to Rs. 150 crore in expansion and upgradation of the company’s passenger car network.
Mr. Aulbur said there were liquidity issues in the market and the company was working with financers for its buses and trucks “as there are stringent norms for lending to small and medium enterprises. We raised prices of our products across the board by 2.5 per cent last week.”
The company’s trucks will initially focus on the coal mining sector and MBI will look at other areas in future. He said the company had been sourcing products locally for the last ten years and this had been growing at 10 per cent annually.
However, he ruled out setting up engines and transmission facilities in India in the foreseeable future. MBI Chairman Joachim Schmidt said, “I am not sure how the development of the automobile industry in the world will pan out. Almost all auto markets are in a downturn and I think overall the passenger car market will see a degrowth of 10 per cent in 2009 over 2008.” The company’s $1.1 billion joint venture with the Hero Group to make trucks, Hero-Benz, where Daimler-Benz has a 60 per cent stake is on track to set up a facility near Chennai.
It may be recalled that Mercedes Benz India used to run its manufacturing operations from Chikhli, Pune. That facility was set up on a land leased out by Tata Motors Ltd. Mercedes Benz India moved out of that place in December 2008, as it wanted to set up a bigger facility meet future demand.
According to Aulbur, the new facility has peak production capacity of 15,000 passenger cars and 4,000 commercial vehicles per annum. Initially, the company plans to work in only one shift, making 5,000 cars and 1,200 trucks & buses, he added.