BMW and Skoda India have significantly cut cost by manufacturing in India.
Luxury car makers are increasingly looking at increasing localisation of their manufacturing process, Mercedes-Benz on Thursday announced production of its popular GLC from its Chakan plant in Pune.
The car has been priced starting Rs 47.90 lakh (ex-showroom Delhi) and officials said along with the costs, local production would reduce the waiting period considerably, especially with the festival season ahead.
This is Mercedes-Benz's ninth product to its local production portfolio in India.
Piyush Arora, Executive Director (Operations), Mercedes-Benz India said, "We are extremely satisfied with our localisation strategy, which is pivotal to our long-term success in this dynamic market. The rolling out of the 'Made in India' GLC underscores our positive outlook for the Indian market, as we look forward at introducing more locally produced vehicles depending on future market growth."
According to industry experts, in order to force their heels in the Indian markets car makers including the luxury makers ones are betting high time on increasing the localisation in production. As per the industry statistics, at present market share of premium cars in India is just 1-2% of the total market as compared to about 4-5 % in markets like China. Brazil has penetration of about 2.7% in the luxury car market segment.
Jaguar Land Rover (JLR), a British brand owned by Tata Motors too has showed its inclination to increase the localisation in order to cut the cost and improve overall efficiency of their products. "Though at present we have been assembling out completely build up units (CBU) in India, eventually we will have to move towards more and more localisation," said Rohit Suri, President, JLR said recently during the launch of Jaguar XF, which too is priced starting Rs 49.50 lakh (ex-Delhi).
Skoda India which positions its products in the premium segment, had claimed that the company has managed to reduce the cost of production of one of its models by about 20-25% by shifting its location and engineering methods on a trial basis. Sudhir Rao, CMD, Skoda Auto India, during an interaction with dna had said that the new products are being made at the company's Aurangabad plant and Chakan (Pune) plant of Volkswagen.
Similarly, BMW India also claims to be using at least 50% of local components for BMW 7-Series, which is assembled in its Chennai plant.
As per a forecast by IHS Automotive, in 2015, Indian luxury car market grew 6.4% year on year with over 35300 units sold during the period. Sales are expected to grow to 87300 unit sales by 2020-end.
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