Mercedes-Benz Eyes Significant Expansion with Plans to Double Pune Plant Capacity

In a strategic move to bolster its position in the Indian luxury car market, Mercedes-Benz is gearing up to double the installed capacity at its manufacturing facility in Pune, India. The German automotive giant is eyeing an increase from the existing 20,000 units to an impressive 40,000 cars per annum. This expansion initiative comes as Mercedes-Benz focuses on launching new models and expanding its presence in the country.

While the plan is still in its early stages, Santosh Iyer, MD & CEO of Mercedes-Benz in India, confirmed to TOI that the company has initiated the process to evaluate future expansion needs. “While we are fully focused on 2024 right now, we will need to expand if the existing growth rates continue,” he stated. The announcement follows the company’s successful sales performance, reaching 17,408 units in 2023, reflecting a 10% growth over the previous year’s 15,822 units.

Despite completing three decades in India, Mercedes-Benz remains optimistic about the luxury market’s potential, which achieved record highs of approximately 47,000 units in the previous year and exhibits no signs of weakening. The company plans to introduce more than a dozen new cars in 2024, including three electric models, and will invest over Rs 200 crore in manufacturing operations, new product launches, and digitization.

The Pune factory, situated on a 100-acre plot, is the likely location for any new capacity expansion. Iyer emphasized, “We will see how this year goes and only then take a call on doubling capacity.” He highlighted the sustained robust demand in the Indian market, especially as the average selling price of Mercedes-Benz vehicles has risen from Rs 57 lakh in 2018 to Rs 88 lakh last year. “This is not aspirational consumption but true luxury consumption. We are very much focused at the top-end of the luxury market.”

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