Top Indian luxury car makers, such as BMW, Audi and Mercedes-Benz have revealed intentions to introduce more locally assembled products in the domestic market. As per reports, the auto majors are looking towards expanding their product portfolio in sub-Rs. 25 lakhs price range.
Expressing his views on the company's new expansion plans, Philipp von Sahr, President, BMW Group India, was quoted as saying, “All our cars made at our Chennai plant conform to global quality parameters. So, going forward, we have also decided to add our top-end 7-Series saloon to the league of locally assembled cars. It would help us to increase the value for our customers and keep our prices competitive.”
Sahr further added, “We want to have successful sales at every price points. Even as many of our cars would be expensive than our competition, we offer more value in our products by localizing our production in India.”
The localised production operations is commonly referred as Completely Knocked Down (CKD) assembly and helps in keeping prices of imported vehicles within tolerable limits. Interestingly, the imported parts are levied 10 per cent import duty, whereas completely assembled units are charged 75 per cent customs duty on their arrival on Indian turf. Hence, CKD assembly helps luxury car makers in offering their products at competitive price tags in the domestic market.
The Indian arm of BMW's compatriot- Audi has also divulged similar intentions. The company has affirmed that it will take its tally of locally assembled vehicles to five cars, by the end of this year. Michael Perschke, Head of Audi India, said, “We would increase our local production allowing us the flexibility of technology at better price points across different models. The simple strategy to localise cars is to offer stronger price points and package them as per the local needs. Any strong player would need local assembly to derive long-term advantages over its competitors.”
Mercedes-Benz India, the globally renowned German auto major and BMW's eternal rival, has announced plans to invest Rs. 850 crore on production expansion operations of its Chakan manufacturing unit in Pune, Maharashtra. Reportedly, the company wants to begin local assembly of its latest hit in European auto markets, the A-Class hatchback.
Eberhard H. Kern, Managing Director (MD) and Chief Executive Officer (CEO), Mercedes-Benz India, was quoted as saying, “Most of our future products will be in the entry-level segment with prices starting from Rs. 20 lakh. We will launch the premium hatchback A-Class in the country during middle of this year.”
