Companies

Mercedes likely to raise localisation level

Our Bureau Hyderabad | Updated on March 17, 2011 Published on March 17, 2011

Mr Peter Honegg, Managing Director and CEO   -  P_V_SIVAKUMAR



German luxury carmaker Mercedes Benz is upbeat on India market prospects and expects to cross 10,000-vehicle sales mark within the next two years, up from about 6,000 it logged in 2010.

The automaker continues to evaluate new models for India launch but is concerned about the budget proposals for CKD units, which impact cars made by them.

“We would love to bring in the to-be launched new Benz A-Class into India. But this is subject to the current taxation system, which is high and makes it tough for us to introduce here,” Mr Peter T. Honegg, Managing Director and CEO of Mercedes Benz India, said.

Addressing a press conference here at Mahavir Motors' new Rs 10-crore facility in the IT hub of Hyderabad, Mr Honegg said: “There is need for clarity on the Budget proposals on CKD units. We are treading cautiously on the issue, unsure about its impact. If these proposals go through, we may have to consider increasing the level of localisation in India, which is about 34 per cent now.”

“Mercedes Benz has a market share of about 38 per cent in the country. Last year saw growth at 80 per cent. Such a high growth rate may be difficult to repeat this year, even though March has been exceptional,” he said.

The company has started second shift at its Chakan plant. The second shift enables it to produce about 10,000 vehicles a year. “We hope to achieve such numbers within the next two years,” he said.

Bus building plant

Referring to the bus building plant, Mr Honegg said: “We expect approval for the project from the headquarters within a few weeks. Once we secure the nod, we would be able to finalise investment plans and possibly roll out buses by the end of the year. Currently, engine and chassis are made there. With a new plant we would be make the entire bus.”

“The market for the category where we plan to pitch these buses is about 1,000 a year. Of this, we plan to garner about 200 numbers within two years,” he said.

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Published on March 17, 2011
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