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Mercedes-Benz puts on hold investments into India

German luxury carmaker Mercedes-Benz has put on hold its investments into India following the Supreme Court ban on the sale of high-end diesel vehicles and SUVs in Delhi and the NCR.

The company, which launched its new SUV, the GLS 350 d on Wednesday, said the apex court ruling had put a question mark on India’s credibility as an investment destination.

Roland Folger, managing and director and CEO, Mercedes-Benz India, who launched the new SUV, described the ban on high-end diesel cars and SUVs in Delhi as “a lost opportunity for India.”

The new GLS will be locally manufactured at its production facility in Pune. Folger had described this as “yet another illustration of our vision of ‘Make in India’, and gives us the opportunity to provide the newest products for our elite customers here.”

However, later speaking to the media he warned that the company’s investments would be affected in the long-term if the apex court ban continued. “Most of the decisions are postponed rather than completely cancelled,” Folger was quoted by a news agency. “If the ban continues, then certainly cancellations will come into play.”

Folger said Mercedes-Benz was slowing down additional hiring. “You cannot justify higher investment with low volumes,” he remarked. The German automaker has invested about Rs.1,000 crore in India over the last 10 years. It has also announcement an investment of Rs.150 crore at its Pune plant to double production capacity to 20,000 units per annum.