With the unveiling of the B-class, Mercedes-Benz has lined up a series of vehicles to complete its portfolio. The offerings can give a potential advantage over its rivals, Audi and BMW. Over the last few years, Mercedes-Benz has been losing out on market share. Perhaps, the company is taking a slow route to gain back its share of the pie but looks like it could be the fate turning route. These new products would include the A-Class, B-Class, GLA-Class (crossover positioned against the BMW X1 and Audi Q3) and CLA-Class (compact sedan which will rival the Audi A3).
”We are not in the numbers game now because the luxury market at 25,000 units isn’t big enough to fight for and our portfolio isn’t complete yet. We will take on the market in 2014-15 when our portfolio is complete and the luxury market size increases to 1,25,000 or more per annum,” Debashis Mitra, Director (Sales and Marketing), Mercedes-Benz, said.
In order to save on the cost due to high import duties, Mercedes-Benz is looking towards aggressive localization. Currently, the company assembles C-Class, E-Class and the S-Class in India. To the existing CKD line-up, six more products are to be added up. The B-Class along with three others from Mercedes front-wheel Architecture (MFA) platform will be launched within the next couple of years. Thus, the company has to ramp up its production capacity from 10,000 units per annum to 25,000-30,000 per annum by 2014-15.
The capacity expansion by three to four times would need an investment of around Rs. 400 crores. Recently, the company had increased the capacity at Pune plant from 10,000 units to 20,000 per annum with an investment of Rs. 200 crore. Plans are to invest some more and increase the output to 40,000 units per annum. The company expects to increase its plant capacity to 90,000 units per year by 2020-21. Talks are on to create new assembly lines.