NEW DELHI (AP) - DaimlerChrysler AG began construction of a plant in western India Thursday so the company could meet growing demand for luxury cars in one of the world's fastest growing economies.
The plant near Pune, a car manufacturing hub, will be DaimlerChrysler's first fully owned production facility in the country. Currently, the maker of Mercedes-Benz cars operates a manufacturing plant on lease from Indian automaker Tata Motors Ltd.
DaimlerChrysler is investing $67.5 million in the new plant that will have a capacity to produce 5,000 vehicles annually, the company said in a statement. It will initially employ 350 people.
Construction began after Vilas Rao Desmukh, the elected head of Maharashtra state, where the plant is located, inaugurated the project, the statement said.
The first car from the new plant is expected to roll out in early 2009.
''As a company, we have enjoyed steady and profitable growth in India and we are looking forward to continue our success story here in our own premises,'' said Wilfried Aulbur, chief executive at the company's Indian subsidiary.
Rising middle class incomes and the launch of new models have driven car sales in India, which are expected to nearly double to 2 million units by 2010.
Although small compact cars dominate Indian roads, high-end luxury cars are increasingly finding buyers among the newly rich in Asia's fourth-largest economy.
DaimlerChrysler in India sold 2,121 units of the Mercedes-Benz S-Class, E-Class and C-Class sedans in 2006, up 11 percent from a year ago.
Rival carmaker BMW AG plans to roll out at least 1,700 cars a year from its first assembly plant in southern India, which was inaugurated in March.