Mercedes-Benz, the well known German premium car maker, has said in an official statement that because of depreciation in the value of rupee against the strong US Dollar, the auto company is likely to announce a price hike in near future. The Managing Director and Chief Executive Officer of Mercedes-Benz India, Eberhard H Kern further continued that the auto maker is looking ahead to invest Rs. 250 crore, in order to increase the production potential of its existing plant at Chakan in Pune to 20000 units a year from 10,000 units.
Confirming the statement, Kern said, “We are investing an additional Rs 250 crore into our production facility to double the capacity by next year. Today we have a capacity 10,000 units a year, and from next year the available capacity will be 20,000 units.”
It must be noted that the value of rupee has fallen by more than 10 per cent in the last one month, marking an all time low Rs. 60 against dollar. At the sidelines of launch of E-Class, Kern said, “We look at this development a bit worried. The rupee lost around 10 per cent since last month against euro and dollar. For the time being we are safe. We follow long-term hedging strategy. But if the rupee stays on this weak level, we have to look at our pricing.”
In the Indian auto market, Mercedes Benz has offered a number of models, right from premium hatchbacks to Sports Utility Vehicles with a base price of Rs. 21 lakh. He added, “If you import your kits or parts or cars in euro or dollar and sell in rupee, there comes pressure on pricing. Hedging does not last forever."
"We are investing an additional Rs 250 crore into our production facility to double the capacity by next year. Today we have a capacity 10,000 units a year, and from next year the available capacity will be 20,000 units," Kern said adding that the additional capacity creation is for the future requirement. Reportedly, German auto maker has invested around Rs. 600 crore in its Indian operations