Daimler to invest $78 million to expand its India factory that builds Mercedes-Benz cars

Article by Christian Andrei, on December 9, 2010

For the expansion of its factory in Pune, India, Daimler AG plans to invest as much as INR3.5 billion rupees ($78 million). The Pune factory builds Mercedes-Benz cars and the expansion is well-time as the demand for luxury vehicles is growing in the nation.

Suhas Kadlaskar, the local unit's director of corporate affairs says Daimler is adding a second production shift in Pune to double the plant’s capacity to 10,000 vehicles annually. Kadlaskar told reporters that Daimler will spend INR2 billion on a paint shop that will be ready in 2012.

In an October 2010 report by the Confederation of Indian Industry and A.T. Kearney Inc., India's market for luxury goods and services is expected to triple to $14.7 billion by 2015.

In September 2010, the head of the local unit Wilfried Aulbur says Daimler expects Mercedes-Benz sales in India to rival the U.K. within a decade as rising wealth drives demand.

BMW AG, Daimler and Volkswagen AG's Audi unit seek to tap the rising demand for premium brands in India, where stock market gains and economic growth spur spending on luxury.

According to data compiled by the Society of Indian Automobile Manufacturers, Daimler’s passenger vehicle sales in India surged 79 percent from a year earlier to 3,827 units between April 2010 and November 2010. The industry group adds that BMW’s sales rose 72 percent to 4,031 vehicles in the period. [via autonews - sub. required]

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