Mercedes upping India capacity, bets on FTA

As negotiations between India and the European Union (EU) for a free trade agreement (FTA) have been intensified, German carmaker Mercedes-Benz says it stays committed to its investment plans in India.

The company said that it will invest Rs 850 crore investment, as planned, to double capacity at its Pune plant to 20,000 units per year by October this year.

"We are building capacities not to keep it unutilised. We will go ahead with our localisation plans," Eberhard Kern, managing director, Mercedes Benz India told HT.

The long drawn out India-EU FTA talks recently gained momentum with ministerial level discussions in Brussels last week. EU has been pushing for a drastic reduction in import duty of cars that will work to the advantage of German premium car manufacturers operating in India. The current duty structure, which works out to 120% for directly-imported completely-built cars, forces them to invest in local production.

Benz, which is lagging behind its compatriots BMW and Audi in luxury car segment, strives hard to return to the top with a slew of launches. Mercedes-Benz will launch diesel version of its luxury hatch B-Class, smaller A Class and SUV GL in the next three months.

 

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