Mercedes-Benz has been hit by the change in government regulations regarding CKD duties. The German automaker was caught on its back foot, when the government decided to hike duties on pre-assembled parts to 30% from 10%. The S-Class is currently assembled in India but the engine is brought in as a complete unit. However now with the change in regulations, Mercedes-Benz claims to be losing Rs. 10 lakh on every S-Class they sold. Thus, the company has decided to locally assemble the engines of the S-Class, which will be done by Force Motors. Force Motors is not new to assembling engines for Mercedes. The Indian automaker assembles engines of the C-Class and the E-Class for the German automaker.
Now once Mercedes-Benz starts utilizing the locally assembled engines in the S-Class, it is quite certain they would be able to save quite a bit of costs in production of the S-Class. We can expect a slight price reduction of the S-Class once the locally assembled engines find their way into the bay of the S-Class. This whole exercise will take atleast four months and will help Mercedes in maintaining their leadership in the super luxury segment.
Source – Oncars.in