Mercedes Benz India considering CKD assembly of the A-Class

Mercedes Benz India is chuffed about the 400 bookings it has received in just 10 days for its latest car, the A-Class sports hatchback. The latest generation version of the A-Class, the third generation model, is a hot selling car for Mercedes Benz globally. In India too, the start for the A-Class has been very promising, so much so that Mercedes Benz has announced that the initial bookings for the A-Class have been the car maker's best ever booking performance for a new car model. Clearly, the A-Class sports hatchback has found favour with many luxury car buyers, aided in good measure by the availability of the 2.2 liter diesel engined variant. 

Waiting periods for the A-Class have already hit the 3 month mark. The A-Class is imported into India through the completely built unit(CBU) route and this approach means that the car gets slapped with a hefty import duty.  Buyers of the A-Class also have to contend with a higher road tax, thereby inflating the on road price of the car. CKD assembly will mean that the A-Class is priced well below its current on-road Delhi price of 24.51 lakh rupees, making the sports hatchback a much more attractive buy. According to TheEconomicTimes, Mercedes Benz India is considering CKD assembly of the A-Class. 

From the looks of it, the chance of Mercedes Benz assembling the A-Class in India is high as the car maker is seeing good initial volumes from the car. If this trend continues for a few more months, local assembly is highly likely as Mercedes Benz already assembles other high volume cars such as the C-Class, E-Class, ML-Class and S-Class models in India. Also, Mercedes Benz India has plans of expanding its Chakan assembly facility by doubling capacity from the current 10,000 units/year to 20,000 units/year. MFA platform based cars such as the A-Class, B-Class and CLA sedan are expected to benefit from this capacity increase. 

Luxury brands constantly grapple with the need for good volumes on one hand and the need to maintain exclusivity on the other. Walking this tightrope and finding the fine balance between achieving volumes and maintaining exclusivity is what most luxury car brands seeking to break into lower segments need to manage. With cars such as the A-Class and the B-Class, based on the MFA platform, Mercedes Benz is walking a similar tightrope. The future will give us insights as to how the three pointed star brand will cope with such a pressure as it expects its MFA range of luxury cars to deliver a large chunk of sales.