India’s largest luxury car maker and German luxury brand, Mercedes-Benz is planning to manufacture more number of cars in India as there is an opportunity to benefit from lower tax rates and hence they can boost their sales effectively. Earlier this week, the luxury car brand rolled out its first AMG vehicle from its factory in Pune, thus making India one of the very few countries to produce the cars of this brand.
AMG cars are high performance-based vehicles and have only been fully imported to India for sale purposes and its model AMG GLC 43 Coupe became the first AMG car to be produced partially in India. The AMG models are also manufactured in Thailand, the US and Malaysia, apart from Germany.
“We have seen that the AMG has done very well in the performance segment in the last couple of years. We believe that there is a big possibility to further expand the footprint of AMG, and, at the same time, make it acceptable to the broader audience,” Martin Schwenk, managing director and CEO, Mercedes-Benz India, said in a press release.
“That is why we thought of localisation of the AMG brand, and so we launched the GLC 43 Coupe. It is a product which would cost around Rs 1 crore (if fully imported), but after localisation, it comes at Rs 76.7 lakh,” he added.
The import duty levied in India on fully built cars has two slabs — 60 percent and 100 percent and for the partially assembled units is 15 percent and 30 percent, depending on its value.
Mercedes-Benz which sources engines from Force Motors of Pune, was already assembling 10 products in India, including the C-Class, E-Class and Maybach. The eight AMG cars imported by the car-giant witnessed a growth of 54 percent during 2019 but absolute figures of the AMGs were not disclosed.
“We are thinking of taking this further with the A-Class Limousine when we launch the car in India and the AMG version of that. In principle, that is doable. We would be able to increase the portfolio size with that launch,” Schwenk said as he talked about the production possibilities of the future.
“In the last 12-18 months, we invested Rs 400 crore in India, and that is mostly for preparing for the production of new models GLE, GLS, GLC and now AMG. In future, the entry segment A-Class and GLA will also be produced. In total, we have invested Rs 2,600 crore in India so far. We are continuously expanding our portfolio. We now build 11 models in India. We are very satisfied with the demand growth. We have seen growth coming in every month since July. We are now at 80-90 percent of a normal year. So we have had a very strong ramp-up going into the festive period. This is better than what we had hoped for. Diwali will be even stronger and (sales) should be similar to last year’s Diwali,” he added.