Mercedes-Benz India will spend INR2.5bn (US$41m) at its Pune factory this year to double production capacity, managing director and chief executive officer Eberhard Kern said.

Kern told The Hindu the Pune plant has current capacity to assemble 10,000 KD units a year but that would be doubled by the end of the year.

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The automaker has opened seven new dealerships in India this year and plans five more this year on top of the current 57.

Five models are assembled at Pune facility and parts and assembly kits are purchased with euros and dollars, the paper added. Local content varies by vehicle model but is about 40%.

The luxury vehicle segment accounts for about 1.2% of Indian auto sales but this is expected to rise to 4% by 2020.

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