Luxury car-maker Mercedes-Benz India today said it will invest Rs 200 crore to set up a paint shop at its manufacturing plant near over the next 18 months.
"We will have our own paint shop with a capacity of 20 thousand units annually, which is expandable up to 40 thousand units. For this purpose we will invest Rs 200 crore over the next 18 months," Mercedes-Benz India Managing Director and CEO Wilfried Aulbur told reporters here.
The paint shop will be operational by the second half of 2012 and with this additional amount, the company's total investment on its Chakan facility, in Maharashtra, would go up to Rs 600 crore.
At present, the company utilises Tata Motors' paint shop located at Chikhli, near Pune.
Aulbur said the company will also commence operations at its body manufacturing unit next year.
Mercedes-Benz India registered an over 85 per cent growth in sales to 5,416 units during the January-November period this year. Out of this, over 5,000 units were assembled locally.
"Our plant has an annual capacity to produce 5,000 units in single shift and we are running over full capacity. We have just started the second shift operations on a permanent basis and from the next year, we will have an annual capacity of 10,000 units a year," Aulbur said.
The company currently employs 700 people at its Chakan plant. The headcount will double by next year following operationalisation of the paint shop and body manufacturing unit, he added.
The Indian luxury car market has grown by about 60 per cent to about 15,000-16,000 units this year, the company said.
When asked if Mercedes will be the market leader in the segment this year, Aulbur said: "We are not concentrating to be the number one. Our focus is on profitable growth and we are investing heavily on customer relationship."
On whether the company will assemble more models in India, he said: "By 2013, we will see more vehicles coming into the country that will be produced locally."
He, however, did not disclose details.
Mercedes-Benz India manufactures C Class, E Class and S Class models at its Chakan plant, while high-end models such as the M Class are imported.
Asked if Mercedes-Benz would consider exporting cars made in India to other countries, on the back of expansion of its manufacturing facilities, Aulbur said: "Currently our focus is on the domestic market. However, I see potential in exports also in the long run."
"We are investing this money (Rs 600 crore) to make India as a major hub in the mid-term," he added.
The company has fifteen dealerships in the country at present and is in the process of opening two more at Rajkot and Baroda. It today rolled out its 30 thousandth unit, an E- Class sedan, from the Chakan facility.
Mercedes-Benz has sold 14,000 E Class models in India since 1996.