Mercedes will stay focussed on the top-end cars in India and not venture into the volume driven compact vehicle business with its A-class cars, the Economic Times of India said.

The A-class sells well in the west, 800,000 to date, primarily in Europe, but the report citing DaimlerChrysler India MD & CEO Hans Michael Huber said its pricing would place it beyond the archetypal B segment car in India which is in the price band of Rs 3.5 lakh to Rs 5 lakh.

According to Huber, there is a strong connection between the size and price of the car in India, which is specially visible among compact cars. Hence, it would not make commercial sense to assemble or import these cars into India.

The newspaper said Mercedes sales are expected to be less than the 1,300-plus mark recorded in 2001.

Sanjiv Sahajwala, head of sales and marketing for the company, argued that it was difficult to sustain the intial burst of numbers generated by the launch of a new model last year and said that, in 2003, Mercedes expects to grow by at least 10-12% with its core locally-asembled C, E and S class products, supplemented by built-up imports such as the M-class, SLK and CLK.

The Economic Times said Mercedes does not export any cars assembled at its Pune facility to markets in the Asia region but shipments of heavy forging and software to its global sourcing system have risen by over 20% this year.

Vendor exports could rise to 60 million euros this year compared with 48-50 million in 2001. Indian local content in the cars assembled there ranges from 25 to 50%, the report said.