Mercedes Benz India is investing in new lines at Chakan for assembling passenger cars due for launch over the next one year. With this expansion, the luxury car maker, will double its existing capacity to around 20,000 units a year in two shift operations.

The company is also investing around Rs 200 crore in setting up a paint shop that will have the capacity to paint 20,000 units every year, and become operational in a couple of months’ time, Mr Peter Honegg, Managing Director and CEO, MBI, said.

The new lines being built are meant for production of the M-Class, B-Class and A-Class models. The Chakan facility already assembles the C, E and S-Class cars here. Elaborating on the company’s plans over the next 18-month period, Mr Honegg said that production of the M-Class will begin at Pune by the year end. The hatchback was launched a month ago as a Completely Built Unit (CBU). Assembling of the B-Class, which is due for a launch by the end of 2012, again as a CBU, is expected begin in a year’s time, followed by the A-Class in another six month’s time.

“Our strategy is to introduce the cars as CBUs, but at a price of a car assembled locally, because we are entering new segments,” he said. Though the company takes a small hit on profits, this helps to increase awareness and develop markets, he added.

Once the new lines and paint shop are in place, MBI’s total investment at its Greenfield plant at Chakan will touch Rs 650-700 crore. This includes the existing and new assembly lines for passenger cars, a bus body building facility and a line for trucks.

>alka@thehindu.co.in

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