India turns Mercedes' largest assembly mkt

German automaker not planning part-by-part production in the country

- Alisha Sachdev

India is Mercedes Benz’s largest assembly centre and fastest growing foreign market, but its relatively small sales here means the German luxury carmaker is not thinking of starting part-by-part production in the country, Matthias Luehrs, head, region overseas, Mercedes Benz AG, said during a recent visit.

Merc’s focus in India is to assemble vehicles from knocked-down (CKD) kits, unlike in China, where it makes cars from the scratch.

The reason: despite India being billed to become the fastest growing economy in the world, its luxury car market is still only 1% of its global sales, or less than 40,000 units out of 3.7 million passenger vehicle volumes annually.

By comparison, China’s passenger vehicle market is around 20 million units in annual sales, while luxury cars account for nearly 2 million.

To venture into local production, carmakers need at least 300,000 units in annual sales