Mercedes-Benz is looking to strengthen India's role in its global manufacturing and supply chain operations.
The German luxury carmaker plans to expand local sourcing and deepen its manufacturing presence in the country. It also sees opportunities to use Indian suppliers and technology partners to support its international operations.
Ola Kallenius, Chairman of the Board of Management of Mercedes-Benz Group, told that the company is on track to record its highest-ever annual sales in India, provided the current growth continues.
Mercedes-Benz sold 15,190 vehicles in India between January and September 2026, marking an 8 percent year-over-year increase. The company also recorded its best-ever September quarter, with sales rising 6 percent to 5,422 vehicles.
The carmaker has announced an additional investment of Rs 200 crore in India this year. This will take its cumulative investment in the country to Rs 3,200 crore, Kallenius said.
While he did not share a detailed financial roadmap, he indicated that India's growing economy and rising wealth creation could support a larger manufacturing commitment in the future.
India currently accounts for a relatively small share of the country's passenger vehicle market. The luxury car segment sells around 60,000 vehicles annually, representing just over 1 percent of the overall passenger vehicle market.
However, Mercedes-Benz sees considerable room for growth as consumer purchasing power improves.
Kallenius indicated that the company could gradually increase localization as the market expands. He also clarified that no decision has been made to move toward manufacturing individual components in India.
"At some point in the future, you reach an operating point where you can perhaps go part by part," he said.
Currently, Mercedes-Benz assembles more than 11 models at its 100-acre manufacturing facility in Chakan, Pune. The plant uses completely knocked-down (CKD) kits for vehicle assembly.
The company also works with Indian suppliers for locally sourced components, including engines and axles.
Also Read: India's Consumer Durables Market: The Rise of Premium Demand
Its current India operations include:
Beyond serving domestic demand, Mercedes-Benz is exploring opportunities to integrate Indian suppliers into its international supply chain.
Kallenius said the company could increasingly source components and technology solutions from India for its operations outside the country.
"It's more likely than not that we will use India as a source also for a supply base outside of India," he said.
India's engineering capabilities are another important part of this strategy. Mercedes-Benz Research and Development India (MBRDI), which recently completed 30 years of operations, is the company's second-largest engineering center outside Germany.
The center works across several areas, including mechanical engineering, electrical systems, powertrain development, and software. Kallenius said MBRDI would become increasingly important to the company's global research and development network.
The company is looking to expand its presence across manufacturing, technology, engineering, and sourcing over the next five years. This reflects its confidence in India's long-term growth potential and its growing importance in global manufacturing.
With rising luxury car demand and stronger local supplier capabilities, India could play a larger role in Mercedes-Benz's international operations.
We use cookies to ensure you get the best experience on our website. Read more...
