MUMBAI: On the back of strong double digit growth, Stuttgart based luxury car maker, Mercedes Benz India inaugurated its second manufacturing facility in Chakan on Thursday and it announced the roll out of its new generation compact SUV, GLA from the new facility.

The move will double the plant capacity to 20,000 units per annum and prepare the car maker to be future ready. Thanks to local production of GLA, the price of the compact SUV has been reduced by over Rs 1.5 lakh to Rs 2.5 lakh and the new price now starts at Rs 31.31 lakh to Rs 34.25 lakh ex-showroom Pune.

The latest development not only makes India the largest aggregator or assembler of three pointed star cars for HQ in the world, but the announcement of the company to locally produce GLA compact SUV, also creates a distinction of being the only base in the world to make three car lines, the compact cars, salons and SUVs in one plant for Mercedes Benz.

The GLA was the latest addition to the new generation compact cars for Mercedes Benz, which already makes for 30 per cent of its overall volumes and the local production may have also been driven by strong demand for the vehicle, 9 months into the launch.

The total investment in the manufacturing facility now stands over Rs, 1,000 crore since inception. The chief minister of Maharashtra, Devendra Fadnavis inaugurated the new production facility along with Prakash Javadekar, the union minister for environment, forest & climate change and Subhash Desai the industry minister for the state of Maharashtra.

Inaugurating the plant in Chakan, Eberhard Kern, MD of Mercedes Benz India told ET, that the country is most focussed market for HQ and the investment in the new plant underlines the commitment that Daimler has for India in the company's long term vision.

"We believe that the best is yet to come for India from Mercedes Benz. We grew by 40 per cent in the first quarter; the growth in the second quarter has been even steeper, so we are heading towards a very strong double digit growth in 2015. With the start of a new plant, we are future ready. We think this market will touch 1 lakh cars per annum by 2020 and we will have a sizeable share in that," added Kern.

The Indian assembly plant was the first base to locally produce SUVs like ML and GL outside of US, informed Kern and with the GLA too it creates a distinction of being the first assembly base in the world outside of its manufacturing base in Germany.

While both Mercedes Benz and Audi share their quarterly numbers, at the end of first quarter of 2015, Mercedes Benz was ahead of Audi by over 350 cars and it seems as of first week of June, Mercedes Benz continues to be ahead of Audi as the number 1 player for the first half of 2015. In a recent interview to ET, Joe King the head of Audi had also expressed confidence that the Ingolstadt luxury car maker will retain the number 1 position by the end of the year.

Mercedes-Benz India delivered 10,200 cars and SUVs in 2014, the highest ever and 13 per cent more than the previous year. It is aiming for another strong year with double-digit growth. To entice buyers, it will be bringing in 15 models this year, including facelifts and new variants. It will be opening 15 new dealerships in 2015, taking the total to 80 across the country. Apart from these, Mercedes-Benz will be opening three AMG Performance Centres.

Mercedes-Benz's local manufacturing now strengthened with as many as six key models made in India: S-Class, E-Class, C-Class, M-Class, GL-Class and the GLA. The company is likely to add CLA sedan in future.

Assembling vehicles locally has allowed the company to significantly reduce prices because of the variation in import taxes. Kits from where the vehicles are assembled locally are taxed at 24-30 per cent (if the engine is assembled locally) or 40 per cent (if the engine isn't assembled here), compared with 167 per cent for a vehicle imported as fully built.