Mercedes-Benz expands production capabilities in India, exports SUVs to Europe
Mercedes-Benz recently exported a selection of Chakan-manufactured SUVs to Europe, aligning with the Centre's push for a Free Trade Agreement with Europe and the UK. The shipment consisted of left-hand-drive GLE SUVs, marking the second instance in half a decade that the company utilized its Indian assembly plant for global markets. A representative from the brand confirmed the news, noting that their Chakan facility's production is "flexible and efficient, enabling capacity to be utilized in accordance with global demand."
High-capacity utilization at the Chakan facility
The Pune-based Chakan facility has achieved over 85-90% capacity utilization of its 20,000-unit-per-year production. To meet increasing demand, the company has implemented three shifts in recent quarters. India has demonstrated its value as a high-quality production hub for Mercedes-Benz, with its manufacturing standards being employed for component sourcing. The export of Indian-made Mercedes-Benz GLE SUVs could indicate further opportunities in a post-FTA world with Europe and the UK.
Adapting production lines for the European market
Financial documents submitted by Mercedes-Benz India to the Ministry of Corporate Affairs for FY-2023 reveal that the company secured an export order of BR167 LHD vehicles for the European market. To accommodate this order, existing production lines in the body shop, paint shop, and assembly line were modified. Although the exact number of exported vehicles remains undisclosed, the alterations made to manufacturing lines underscore the importance of this production batch.
Potential impact of Free Trade Agreements on exports
Industry experts propose that if a Free Trade Agreement (FTA) is reached with Europe or the UK, India could cater to these markets due to its competitive cost and proven quality standards. The instances of cars made in India being exported to the US and Europe serve as a compelling argument for potential future orders in a post-EU-UK FTA era. Mercedes-Benz's Chakan assembly plant has established a standard for other manufacturing bases.
