Mercedes Benz GLA class to be assembled in Pune, prices slashed by Rs 2.5 lakh

Mercedes Benz GLA class to be assembled in Pune, prices slashed by Rs 2.5 lakh
Highlights

German luxury carmaker Mercedes-Benz today rolled out its sixth locally assembled model, the GLA Class of SUVs, and also formally commissioned the third assembly line at its plant near Pune.

German luxury carmaker Mercedes-Benz today rolled out its sixth locally assembled model, the GLA Class of SUVs, and also formally commissioned the third assembly line at its plant near Pune.


The new locally-assembled GLA Class of SUVs come up to Rs 1.5 lakh to Rs 2.5 lakh cheaper than the imported models at Rs 31.31 lakh for GLA 200 CDI and the GLA 200 CDI Sport at Rs 34.25 lakh (ex–showroom Pune), as the local parts sourcing has been increased to 60 per cent.

When asked whether the company will increase the localisation further, Mercedes-Benz India Managing Director and chief executive Eberhard Kern answered in the negative saying more local sourcing is not feasible with current volumes.

"Having higher than 60 per cent local sourcing of parts means you go into full-fledged production and not assembling. To begin full-fledged production, you need to have at least 70,000 to 1,00,000 units of sales for a model, which looks distant in the near future," Kern said.

It can be noted that its smaller rival BMW had last month announced up to 50 per cent local sourcing for some of its models from the earlier 20 per cent and has plans to take this to over 70 per cent going forward.

GLA class is a newly introduced entry level compact SUV, over the entry level sedan CLA as initially planned.

On advancing the local assembly of the GLA class, Kern said, "The GLA has been a sensation in the compact luxury SUV segment and has witnessed an increasing demand from across the markets. Buoyed by this rising demand, we decided to commence its local production and cater to even more customers wanting to own this stylish vehicle."

The GLA would be the first of the new generation cars to be rolling out of the plant here, Kern said.

However, he was quick to add that the CLA Class will also be locally assembled as per the plans in next few months.

Kern said the GLA class of SUVs are the first new generation cars to be locally produced with the others being the S, E, C, M, and the GL Class of cars and SUVs.

With the new assembly line, the Pune plant set a record of becoming the only assembly line under the Mercedes-Benz umbrella across the world to have flexible assembly units on which it can roll out all the six models being assembled here.

The company has the largest assembly line in the country amongst the luxury car makers with 20,000 units of installed capacity with a cumulative investment of Rs 1,000 crore since 1994, which also makes it the largest investment by any luxe carmaker in the country.

The new assembly line and the locally made GLA class were launched by Maharashtra Chief Minister Devendra Fadnavis.

For the third assembly line, the company has invested around Rs 150 crore, executive director for operations Piyush Arora said, adding the company has hired around 150 people taking the overall headcount at Merc India to over 1,200.

According to Kern, the new generation models— the A, B, GLA and CLA Classes of cars and SUVs— constitute 30 per cent of total sales here, and of this, 40 per cent come from the GLA Class alone.

On the domestic luxe market, Kern said it was 33,000 units or 1.3 per cent of the total market last year and he expects this to touch 40,000 units this year, given the momentum seen since the beginning of the year.

Mercedes-Benz toppled its larger rival Audi in the first quarter of the year with a massive 40 per cent spike in sales at 3,566, while in 2014 it sold over 10,200 units.

The company launched the GLA Class last September and its local assembly makes it the fastest conversion to local assembly.

The GLA is one of Merc's highly successful models as it redefined the segment and created a whole new customer group who prefer SUV.

Kern said with the local assembly, the waiting period for the GLA will come down further from the present two months.
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