Financial Daily from THE HINDU group of publications
Thursday, May 02, 2002
If volumes pick up... : Daimler may make M-class range here
NEW DELHI, May 1
DAIMLERCHRYSLER India Pvt Ltd will consider the possibility of manufacturing the M-class range in India if sales volume picks up to about 500 vehicles a year, according to Mr Suhas Kadlaskar, Head of Corporate Affairs and Finance.
"We have tested the market. We may think of local manufacturing in the future if sufficient volumes are there,'' Mr Kadlaskar told Business Line.
The fully-owned subsidiary of the German-US DaimlerChrysler AG currently manufactures the C-Class, E-Class and S-Class luxury sedans from its 7-year-old Pune manufacturing facility, in which it had invested Rs 600 crore.
A 3.2-litre petrol engine and a 2.7-litre diesel engine power the recently-launched M-Class sports utility vehicle, which carries a price tag of about Rs 50 lakh.
DaimlerChrysler India has already sold about five units of the M-Class in the country, which are currently imported from the Tuscolossa plant in Alabama, US.
The company, formerly known as Mercedes Benz India Ltd before the international merger of Germany's Mercedes Benz AG and US' Chrysler Corp, is hoping that the introduction of new imported models would spur demand for its vehicles this year.
In calendar year 2002, DaimlerChrysler India hopes to sell about 1,500-1,600 vehicles as against 1,400 cars sold in 2001, of which the C-Class contributed the most with 750 units.
The company sold 75 units of the top-end S-Class last year.
This year, "we hope to sell about 100-150 units of vehicles through import of completely built units (CBU),'' Mr Kadlaskar said.
DaimlerChrysler India is planning to import and sell the M-Class sports utility vehicles and the CLK and SLK convertibles in the country to add to the existing profile.
Increased sales would also translate into better profit for the company, which was once referred to the Board for Industrial and Financial Restructuring, as a sick company. DaimlerChrysler India is targeting a 15-20 per cent rise in profit in 2002 from the Rs 40 crore it made in 2001. Sales turnover, which in 2001 stood at Rs 300 crore, was expected to rise to Rs 375-400 crore, Mr Kadlaskar said. One of the reason for the high proportion of profit to turnover is the low investments and "outsourcing of all activities outside the core business,'' he said.
DaimlerChrysler sources bulk of its component requirements from 6 suppliers who provide the company with assembled kits. Each of its locally-made car is painted by Tata Engineering, which has a plant adjacent of DaimlerChrysler's.
Regarding exports, Mr Kadlaskar said the company had shifted its focus from export of cars to export of components. In 2001, DaimlerChrysler India exported Rs 200 crore worth of components.
Mr Kadlaskar said DaimlerChrysler had no plans for the moment to introduce Chrysler models in the country.
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