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Mercedes starts new assembly line for new M-Class model

Under the hood: Mercedes Benz Indonesia CEO Claus Weidner (right) and the Industry Ministry’s Budi Darmadi, visit the carmaker’s assembly factory in Bogor, West Java, on Wednesday

Linda Yulisman (The Jakarta Post)
Jakarta
Thu, November 22, 2012

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Mercedes starts new assembly line for new M-Class model

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span class="inline inline-none">Under the hood: Mercedes Benz Indonesia CEO Claus Weidner (right) and the Industry Ministry’s Budi Darmadi, visit the carmaker’s assembly factory in Bogor, West Java, on Wednesday. Mercedes has officially launched in Indonesia its new sport utility vehicle (SUV) ML 350 4Matic, which is assembled at the factory. (JP/Linda Yulisman)

Mercedes-Benz Indonesia, a subsidiary of German car manufacturer Daimler AG, commenced on Wednesday the operation of a new assembly line at its plant in Wanaherang, Bogor, West Java, to meet growing demand for the latest generation of the company’s M-Class vehicle.

Speaking during the launch production ceremony, president and chief executive officer Claus Weidner said that the new line, developed with an investment of up to ¤30 million (US$38.41 million), would assemble the ML 350 4MATIC, the latest generation of its M-Class, which was an icon of the premium sports utility vehicle (SUV) market.

“As we introduced the third generation of the M-Class this June, we received a great response from customers. I am very convinced that we’ve made the right decision to localize assembly for this model in this factory, which will be of the same high quality and perfection as those produced in other countries,” he said.

In addition to help speed up the delivery of the car to Indonesian customers, local assembly would also allow the firm offer a competitive price, Weidner further said, adding that the semi-knocked down (SKD) vehicle might be sold for around Rp 1.04 billion (US$107,850), or Rp 160 million lower than the complete built unit (CBU) priced at Rp 1.2 billion.

Under the current tax regime, the shift from the import of CBU to SKD allows a reduction in price as the manufacturer only pays an import duty of 10 percent.

The local assembly of the ML 350 4MATIC, which uses a machine direct petrol injection, follows on the heels of other models, both passenger and commercial vehicles, under the Mercedes brand, such as the C-Class, E-Class and S-Class, which all have been assembled domestically since 1987.

The first assembly line, for example, produces 2,000 units of Mercedes C-Class and 1,750 Mercedes E-Class per year, while the second line makes 400 units of Mercedes S-Class and 350 units of ML and GL-Class.

Being upbeat on the outlook of the Indonesian market, Weidner said that his firm would consider localizing assembly of other models in the future to further intensify the presence in the country, where sales were still lower compared to Thailand, an important market in Southeast Asia.

Engineering deputy director Ary Tjahyono said that at the initial phase, the new assembly line would make three units per day, or around 20 percent of its full capacity of 15 units per day, until the end of the year.

“Next year, we will increase the utilization rate of the line. We are further assessing the market’s response to this ML model,” he said during a plant visit. Selling 3,700 units last year, Mercedes dominated the total premium car market with a 53 percent share, according to the statistics of the Indonesian Automotive Industry Association (Gaikindo). However, the company has not yet provided its sales data for this year.

Indonesia’s automobile industry is expecting annual car sales to hit 1 million by end of the month, with a total 1.1 million estimated for the whole year, which is an all-time high in Southeast Asia’s biggest economy. In addition, premium car segment will make up 1 percent of the figure.

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