DaimlerChrysler gets ready to move

Maharashtra continues to attract huge investments from automotive companies. Over the last eight months, the state government has signed pacts with Bharat Forge, Bajaj Auto, Tata-Fiat combine, Mahindra and Mahindra (and Mahindra-Renault), General Motors and Volkswagen.

Joining this elite list is DaimlerChrysler India. The German automaker opted for the Chakan-MIDC area in Pune for its plant. “After exploring a few states, DaimlerChrysler selected Chakan for its greenfield facility. The announcement was made in November and we are now signing the MoU,” VK Jairath, industries secretary, government of Maharashtra said.

The company will move out of its current facility which is owned by Tata Motors. While officials did not divulge the quantum of investment, sources say that this could be in the region of Rs 250 crore. The facility will be located on 100 acres, of which a third will be used for the first phase. The new plant will be three times the size of the existing one which assembles about 2,000 vehicles on a one-shift basis annually. It will be commissioned by October 2008 with a yearly capacity of 5,000 vehicles on a single shift basis. The E, C and S-Class models will be assembled in the new facility to focus on the domestic market.

“We plan to shift out of the current facility on January 1, 2009. This will be an opportunity for us to modernise the plant and most of the machinery here will be new,” Suhas Kadlaskar, finance director, DaimlerChrysler India said. Though DaimlerChrysler has its R&D centre in Bangalore, officials also have not ruled out setting one up at the new site. “We will do more R&D in India and it might make sense to have this close to our operations in Pune,” said Dr Thomas Weber, member of board of management, DaimlerChrysler AG.

There is also the likelihood of DaimlerChrysler bringing in the A-Class to India. However Wilfried Aulbur, managing director, DaimlerChrysler India reiterated that the focus was on the current lineup. “There is potential for a car below the C-Class but we the existing range is top priority,” he added. Moreover, Kadlaskar pointed out that pricing of the A-Class would be critical. “The current price in this segment ranges between Rs 5 and 6 lakh and I do not think we can match that. Therefore, the market will have to mature before we can bring in the car,” he said.