“There Is India in Every Mercedes”: Ola Källenius

Ashad Hussain

Mercedes-Benz is looking to increase the contribution of its Indian operations to its global business, with component sourcing, technology partnerships and engineering emerging as key areas of focus. While the company has not taken a decision to export complete vehicles from India, it sees opportunities to use local suppliers and technology partners to support operations in other markets.

Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group AG, said the company's Indian operations were becoming increasingly important to its global business.

“I cannot see any Mercedes being developed without India being involved in it,” Källenius said. “There is India in every single Mercedes.”

He also said the company was building relationships in India that would serve markets beyond the country.

“We are building strong tech and supply relationships in India, not just for India, also for the rest of the world. So we can export out of India on a component basis before a full vehicle,” he said.

The distinction is important to the company's current India strategy. Mercedes-Benz is continuing to develop its domestic manufacturing operations while exploring how Indian suppliers and engineering teams can contribute to its international business.

Manufacturing and the Export Question

Mercedes-Benz has been manufacturing vehicles in India for more than three decades. Its Chakan facility near Pune currently assembles more than 11 models using completely knocked-down kits, while Indian vendors supply components such as engines and axles.

The company announced an additional investment of ₹200 crore in India on Wednesday, taking its cumulative investment in the country to ₹3,200 crore. The investment is directed towards manufacturing operations, new product introductions and digitisation.

The Chakan facility is also being used to expand local electric vehicle production. The electric GLC 400 4MATIC, priced at ₹78.5 lakh, is assembled at the plant. It uses the same flexible production line as the company's internal combustion engine models, allowing different powertrain technologies to be produced at the facility.

Mercedes-Benz has also introduced camera-based computer vision systems and industrial robotics across manufacturing processes such as welding, riveting and painting. These investments form part of the company's efforts to upgrade its local production capabilities.

On the possibility of exporting complete vehicles, Källenius has described it as a question of “when” rather than “if”. However, he has also made clear that no decision has been taken.

Asked whether India could become a manufacturing base for global markets, he said: “So, in terms of our vehicle assembly, our current plans are in India for India, but for supply base and tech partners, we have gone beyond that.”

He added that the company was likely to use India as a source for its international supply operations, saying, “It's more likely than not that we will use India as a source also for a supply base outside of India.”

For now, component sourcing and technology partnerships represent a more immediate opportunity than exporting finished vehicles.

From India’s Plants to Mercedes’ Global Network

India's contribution to Mercedes-Benz also extends to research and development. Its Mercedes-Benz Research and Development India (MBRDI) operation, established in 1996, has more than 8,500 employees across Bengaluru and Pune. It is the company's largest R&D operation outside Germany.

The centre works across mechanical and electrical engineering, powertrain development, software, digital product development, embedded systems and connected technologies. Its responsibilities have expanded over the years, with Indian teams working as part of Mercedes-Benz's wider global development network.

Källenius described the relationship between the Indian centre and other global engineering teams as an integrated process, rather than a system in which work is simply handed over from one location to another.

The company is also exploring opportunities in emerging technologies, including artificial intelligence and quantum computing. During his India visit, Källenius referred to work involving physical AI applications in manufacturing and quantum computing.

The expansion of these capabilities gives Mercedes-Benz access to India's engineering talent and technology ecosystem. It also broadens the range of work undertaken by its Indian operations beyond the development of products for local customers.

India's Place in the Next Phase of Mercedes-Benz

The company's growing operational presence comes alongside an expanding domestic luxury car market. India sells around 60,000 luxury vehicles annually, accounting for just over 1% of its passenger vehicle market of approximately five million units.

Mercedes-Benz sees scope for the segment to grow over the next five to seven years. It sold 15,190 vehicles in India between January and September 2026, an increase of 8% year-on-year. Sales during July-September stood at 5,422 units, up 6% year-on-year and 17% sequentially. The quarter marked the company's highest-ever quarterly sales in India.

Electric mobility is another area where Mercedes-Benz expects a larger contribution from India. Källenius expects electric vehicles to account for a high-single-digit share of the company's Indian sales in 2026, rising to around 20% in 2027.

“In India, this year we will end with maybe a high-ish single-digit number of electric vehicles. I think it will be a double-digit number next year, probably starting with a two,” he said.

The company is continuing with a multi-powertrain strategy, retaining petrol and diesel models alongside its expanding electric vehicle portfolio. Källenius said combustion engines would remain part of the company's offering for several years.

“The combustion engine will stay for minimum 10, probably 15 years,” he said.

The approach reflects Mercedes-Benz's decision to expand its electric portfolio while continuing to serve customers who prefer conventional powertrains. In India, the electric GLC is among the latest additions to this portfolio, with the company reporting more than 1,000 bookings before its price announcement.

For Mercedes-Benz, the next phase of its India operations will therefore involve more than increasing vehicle sales. The company is looking to deepen local manufacturing, expand the responsibilities of its engineering teams and build supplier relationships that can serve its global business.

The German luxury carmaker is strengthening its Indian supplier network and R&D operations, even as its immediate vehicle assembly plans remain focused on the domestic market

Driving India: 

• Sales (January–September 2026): 15,190 units, up 8% year-on-year

• July–September sales: 5,422 units, a record for the company in India

• Cumulative investment: ₹3,200 crore, including an additional 

₹200 crore announced on November 4, 2026

• R&D workforce: More than 8,500 employees across Bengaluru & Pune

• Models assembled at Chakan: More than 11

• Vehicles sold in India to date: More than 2,40,000

• New models planned for 2026: 12