Mercedes Benz will assemble the M-class in India

Luxury car manufacturer Mercedes-Benz is planning to start assembling its luxury SUV, the M-Class in India. The company is also planning to launch a car to take on the BMW X1 by 2013 -2014.

“Assembling the M-Class is the next step in adding more models to assembly in India,” Peter Honegg, managing director and chief executive, Mercedes-Benz India was quoted as saying by the Business Line.

He added that the demand for the M-Class is steadily growing and after the sedans, this model has the highest demand. Further he said that Mercedes-Benz will start local assembly of vehicles, including the engines by 2012.

Mercedes-Benz sales

The sales of the M-Class stood at 104 units in March 2011. Mercedes-Benz will save on production cost by up to 60% when it assembles the M-Class locally. This will allow the company to aggressively price their products and will also be a positive move from the customer’s point of view. In January – March 2011 Mercedes Benz sold 2,135 units while its rivals Audi and BMW sold 1,611 units and 2,147 units respectively. Also read: Mercedes Benz SL 350 and GL 500 India launch on May 3rd

Assembly operations of Mercedes-Benz

Mercedes-Benz assembles the C, E and S-Class in India and the M-Class will be the first SUV that the German luxury brand will assemble locally. The remaining models like the GL Class, R Class and AMG will be imported as CBU (Completely Built Unit) vehicles though seeing the trend Mercedes could assemble other models in India in the near future.

Demand for luxury SUV

The demand for luxury SUV has grown manifold in over the past few years. Last year, Mercedes Benz’s arch rival BMW sold 338 units of X1 during January – March 2011 period while Audi also sold their Q5 and Q7 SUVs in generous numbers. Other companies like the Tata Motors owned Land Rover (which has the Freelander 2 and Range Rover SUVs in India) and Volvo (with its XC90) are fast getting hold on the market share. Also read: Mercedes to enter tier-II and tier-III cities

Now that Mercedes-Benz has decided to assemble its SUVs locally it will be able to tap into the growing demand as well as to retain its No. 1 spot as the luxury car brand in India by launching them at competitive prices.

According to Honneg, Mercedes-Benz will launch a compact SUV to take on the BMW X1 by 2013-2014 and an SUV to take on BMW X3 within the next 3 years. Further, the launch of premium small cars from the brand, the A-Class and B-Class will also slated for the same period.