Mercedes Benz scales up investments in India to Rs 850 cr

German luxury carmaker Mercedes Benz is increasing its investment in the Indian operations to Rs 850 crore by 2014 as it prepares to start assembling more models here.

The company's Indian arm, Mercedes-Benz India, currently has an assembly plant at Chakan in Maharashtra where it is investing over Rs 600 crore to scale up operations.

"The investment of Rs 850 crore will help us strengthen our production and operational capabilities with regard to our existing products and our exciting and aggressive product offensive which we are readying for the Indian market," Mercedes-Benz India Managing Director & CEO Peter T Honegg said in a statement.

This investment will enable Mercedes-Benz India to be future ready, he said, adding "we are bullish about the Indian market and this is reflected in our long term commitment towards the dynamic Indian market".

At present Mercedes-Benz India locally assembles its flagship sedans the C-Class, the E-Class and the S-Class sedan.

The company is also set to produce the new M-Class, thus becoming among the first markets to start assembling the vehicle outside Daimler AG’s parent SUV plant in Tuscaloosa in the US.

Commenting on the development, Mercedes-Benz India Director- Technical Piyush Arora said: "Mercedes-Benz India's aggressive growth plan includes the local manufacturing of several new models in the coming years, beginning with the new M-Class".

This fresh investment is in sync with the growth expectations from the Indian market and will further strengthen the range of locally manufactured Mercedes-Benz models from the Indian operations, he added.

The company's Chakan plant started operations in In 2009 and the initial investment of Rs 250 crore was scaled upto to over Rs 600 crore with the setting up the company's paint shop capable of water based painting.

The new paint shop is targeted to be operational by October, 2012 and has an annual capacity of 20,000 units (which can be extended up to 40,000 units annually), the company said.

Mercedes-Benz India further said in addition to the proposed increase in investment, its dealers are also investing over Rs 480 crore spread across its 31 showroom and 41 service outlets located in 31 Indian cities.