In what is an indication of the high-quality manufacturing, Mercedes-Benz India is learnt to have exported a batch of made-in-Chakan SUVs back to Europe. Likely FTAs with Europe or the UK could open fresh demand for made-in-India vehicles.
08 Nov 2023 | 6094 Views | By Ketan Thakkar
At a time when the Indian government is working overtime to kick off the Free Trade Agreement with Europe and the UK and incentivise imports of EVs for fast-tracking Tesla’s entry, Mercedes-Benz India, luxury car market leader in the country, has exported a batch of made-in-Chakan back to Europe in ...
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At a time when the Indian government is working overtime to kick off the Free Trade Agreement with Europe and the UK and incentivise imports of EVs for fast-tracking Tesla’s entry, Mercedes-Benz India, luxury car market leader in the country, has exported a batch of made-in-Chakan back to Europe in FY2023.
The development happens at a time, when Mercedes-Benz India is reaching high-capacity utilisation of over 85-90% at its 20,000-units-per-annum facility in Chakan, Pune. In order to cater to the rising demand, the company has even worked three shifts over the last few quarters.
India, which has been a model assembly base for the German car maker, has proven itself as a high- quality production base globally and the same is leveraged for sourcing of components. The export of made-in-India Mercedes-Benz SUVs may be an indication of signs of things to come in the post-FTA world.
As per the financials of FY2023 filed by the company with the Ministry of Corporate Affairs, Mercedes-Benz India stated that it had received an export order of BR167 LHD vehicles for the European market. These vehicles were built by adapting existing lines in the body shop, paint shop and assembly line. The startup was concluded in the first quarter of 2023.
When contacted, a Mercedes-Benz India spokesperson confirmed the development and said, “Our world-class manufacturing facility in Chakan, Pune produces a comprehensive vehicle range. The production network of Mercedes-Benz Cars is flexible and efficient, enabling capacity to be utilised in accordance with global demand.”
The exported vehicle is understood to be a GLE SUV. While the exact quantum of the batch of exports was not mentioned, the fact that the manufacturing lines were adapted for the order, underscores the significance of the batch of production.
This marks the second time over the past five years that Mercedes-Benz India has leveraged the local assembly plant in India to supply to global markets. In 20l8, the company had shipped the GLC SUV to North America – at the time, India was a back-up base for the German luxury car maker, which was unable to meet the demand for the SUV for a brief while.
FTAs could drive up exports
If the doors are opened up to Europe or UK through an FTA, India may very well cater some of these markets given its attractive cost and proven quality standards, say experts. While it still remains a conjecture, the couple of instances of India-made cars being shipped to the US and Europe would be a good proof case in the event of a big order coming up in the future in the post EU-UK FTA era.
For a brand that has been in India for over a decade and a half, Mercedes-Benz India’s assembly base in Chakan is a benchmark for many new assembly bases that have come up over the past decade or so. In fact Indian CXOs have helped the HQ in setting up assembly bases in South America and South East Asia. Also, there was a phase when the head of manufacturing of Mercedes-Benz India’s plant in Chakan would oversee some select markets in South East Asia from a supply chain and logistic point of view.
Mercedes-Benz India’s Pune office also houses the Global Purchasing Office for the company which has been sourcing critical parts for the international manufacturing bases, given the attractive cost structure.