Chakan plant can meet the demand growth for next 3 years: Mercedes-Benz India chief

Mercedes-Benz Managing Director and Chief Executive Officer Roland Folger on Monday said the issues of the ban on diesel vehicle registrations in Delhi and the unclear scenario of vehicle prices post the rollout of goods and services tax (GST) next year have brought the certain effect of uncertainty to the company's overall planning in India.

Speaking to media after the launch of their second dealership in Hyderabad, Roland Folger said the company's sales growth in the calendar year 2016 would be more or less flat at around 13,500 units of the previous year while They were absolutely clueless about the likely trend in the next year owing to the current uncertainties.

The luxury car company sold nearly 10,000 units during the three-quarters between January-September, 2016, while its SUV (standard utility vehicles) portfolio stood out by posting a 45 per cent growth in the third quarter owing partly to the launch of the locally built GLC SUV in September.

According to Folger, the launch of petrol variants of all the Mercedes models in India was a part of an effort to address the uncertainty over the demand for diesel vehicles though no drastic shift was seen in terms of sale of diesel and petrol variants of the company.

Responding to a question he said the company was prepared to launch the cars compliant with BS V1 emission norms as early as in 2018 if the upgraded diesel is available in India by that time. This will effectively put an end to the difference in emissions between diesel and petrol cars, according to him.

Talking about the customer perception on future car prices, Folger said some customers believe that the GST rates will increase the vehicle prices while others think that the prices will fall after the roll-out of GST-reflecting the current uncertainty in the market. He, however, maintained that company is ready to handle any kind of upside in demand for cars as their India plant has sufficient capacities to meet the requirement in the next 1-3 years.

"The existing annual manufacturing capacity of 20,000 units can even be doubled to 40,000 by introducing a second shift if the demand rises. Therefore, the lower tax rates will be helpful for the economy as well as for the success of Make In India programme," he added.

Mercedes-Benz will be launching the remaining 4 models out of 12 models promised to be launched in the current calendar year, according to him.

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