Mercedes Benz is planning to increase the amount of parts it sources from India and is focusing on improving its delivery network in the face of logistics difficulties in the country.
The company has pursued a 10% annual increase in sourcing from the country over the last decade with components from there including crank shafts for diesel engines, wheel rims for Actros trucks, grab handles for the A-Class and forged and rubber parts.
Mercedes already has around 40 suppliers in the country and is planning to expand this number. It is also building a new engineering centre in Pune to assist them reach a globally competitive standard.
Logistics problems in the country include ship clearance at Nhava Sheva, India’s largest port located south east of Mumbai, which takes three days compared to one day in Singapore. Customs IT standards are also a problem, as is strike action, as was seen in January when truckers and port operatives took industrial action. Read more here 
“All these need to be compensated in the logistics chain to make sure no negative impact comes on production,” Dr Wilfried Aulbur, Managing Director of Mercedes Benz India, told The Times of India. “Our logistics processes have improved dramatically but are still not competitive.”
Last month the carmaker inaugurated its new manufacturing plant, also in Pune. The new facility has independent assembly facilities for passenger cars and commercial vehicles, and was built on an infrastructure with future expansion needs in mind, underscoring the company’s long-term growth plans in the country.
(left to right) Dr. Joachim Schmidt, Chairman of the Board, Dr Wilfried Aulbur, Managing Director and CEO, Prof. D Eberhard Haller, Member of the Board at the new manufacturing facility of Mercedes-Benz India