Mercedes-Benz and SIAM rejects the idea of including auto sector from FTA

Saturday 19 January 2013, 11:20 AM by

Mercedes-Benz India has stated that its supports the view of Society of Indian Automobile Manufacturers (SIAM), the auto industry body, on excluding the Indian automobile sector in Free Trade Agreement (FTA) with the European Union (EU). The German auto marque also hinted that if FTA comes into effect in the auto sector, the luxury car maker may consider transforming its Chakan-based manufacturing plant into an export hub.

Mercedes-Benz and SIAM rejects the idea of including auto sector from FTA | CarTrade.com
Mercedes-Benz and SIAM rejects the idea of including auto sector from FTA

Expressing his views on this, the Managing Director and Chief Executive Officer of Mercedes Benz India, Eberhard H Kern said, “We are completely in line with SIAM position. If FTA comes in, we will discuss how to utilise our plant for optimum output. Exports from our Chakan plant could be one option at that time.”

SIAM believes that reducing the import duties will impact hard on the domestic auto makers, as overseas player will then pose a cut throat competition in the Indian market. Speaking on its support with SIAM, while contradicting the proposed FTA with EU, Kern said, “EU is not a homogeneous situation. We are quite flexible having our own factory here and having factories around the world. We believe in India and believe in our production here. The Chakan factory is a 100 per cent Daimler entity and we will find solutions for its optimum usage (if any) when FTA is implemented.”

He further added that Mercedes-Benz’s Rs. 850 crore investment plan for launching new models and expanding the production potential by the end of 2014 is also on track. Speaking on the company’s future plans for the Indian market, he said that Mercedes-Benz will soon turn out to be the largest auto maker in the luxury car segment by 2016, on the grounds of model launches, volume and also in terms of profit.

Kern said that most of the company’s new models will be placed in the entry-level segment, priced at around Rs. 20 lakh and above. The auto maker is planning to introduce its premium hatchback A-Class, somewhere in second half of 2013, which will be launched as an entry-level model for Mercedes-Benz in India. He further added, “In our global roadmap, India is one of the most important strategic markets. Looking at the size of the market and number of young people, India will become a big market for us in future.”

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