As the trade standoff between United States of America (USA) and China over punitive tariffs on vehicles and auto parts intensified, it looks like the development has turned beneficial for India. Mercedes-Benz India, the wholly-owned subsidiary of Germany's Daimler AG will be the new exporter of GLC SUV for the US market leaving behind China as a critical market and manufacturing base in Asia.
A report in Automotive News claims Mercedes-Benz has already started shipments from its India plant at Chakan near Pune and the made-in-India GLCs should reach the US next month. The GLC is one of the bestselling models of Mercedes-Benz in the North American market.
"The SUV GLC is in great demand worldwide," Mercedes-Benz USA spokesman Rob Moran said. "Therefore, Mercedes-Benz uses the capacities of its global production network on four continents. This also includes the Mercedes-Benz plant in Pune." The GLC units that are currently being sold in the US are built in Bremen, Germany and the US subsidiary has no plans to produce the SUV in its Vance factory, Alabama.
The cost of shipping Mercedes-Benz GLC units to the US from Pune plant in India is higher than from Bremen, but the overall economics are tempered by other costs, including lower labour rates in India, the report adds.
Ford exports EcoSport to the US from Chennai plant
American carmaker started sales of EcoSport in its home country starting from January 2017 and all the variant for the US market is being exported from the Chennai plant in India. Ford Chennai's plant currently manufactures EcoSport for the domestic market as well as for markets such as South Africa, Taiwan, Australia and several European countries.
India as the export manufacturing base
In addition to Mercedes-Benz and Ford, many automakers use India as their vehicle manufacturing hub. Ford's fellow American auto giant General Motors uses Talegaon plant in Pune solely for exports while Nissan and Volkswagen cars made-in-India are bestselling models in many Latin American markets.