German luxury car manufacturer Mercedes-Benz on Monday launched an ''improved'' version of its M-class sports utility vehicle in India. The new SUV will be available in two engine variants – 3.5 litre petrol and 3 litre diesel, priced at Rs53.77 lakh and Rs54 lakh respectively.

Unveiling the M-class at a press conference here, Mercedes-Benz India chief executive officer and managing director Wilfried Aulbur said, "The new M-class offers best of both the worlds-the highest levels of luxury, comfort and on-road refinement combined with excellent off-road capabilities and highest safety standards in its class."

The new M-class is equipped with seven-speed automatic transmission, height adjustable air suspension, 19-inch alloy wheels, leather interiors with burr walnut accents, and the '4Matic' permanent all-wheel drive system with a start-off assist and downhill speed regulation. Both variants feature V6 engines. The diesel engine provides 535Nm of torque, while the petrol version boasts 272 bhp.

''Despite making significant enhancements of equipment, features and performance, we have not changed the price of the SUV,'' Aulbur added.

In defiance of global trends, he also said the company plans to revamp its research and development facility in Bangalore by increasing the headcount to 1,000 engineers from the current 200.

''We will have around 500-1,000 engineers working for our R&D centre in Bangalore in the next few years. We also plan to invest Rs150 crore together with its partners for expanding the distribution network,'' he said. ''Eventually, it will be one of the largest R&D facilities of Mercedes outside Germany, and will cater for the technical needs of our company.''

Referring to the sales target in India for the current year, Aulbur said, ''Though we achieved 46 per cent growth in the passenger cars segment in 2008, we do not expect spectacular growth this year.''

Mercedes-Benz sold over 3,600 cars, 240 trucks and 15 buses in India last year. It is also in the process of setting up a new vehicle manufacturing unit at Chakan near Pune.

Mercedes has slipped to the second slot in the luxury car market, which it has long ruled. BMW raced past Mercedes in the past two months, selling 541 cars against 346 for Mercedes in the January-February period. Thus, Mercedes plans to invest Rs 150 crore together with its partners and dealers to expand the distribution network in the country.

''We will launch new cars in the market. We have bought land at various locations across the country for setting up showrooms,'' Aulbur said.

Mercedes-Benz India appears hopeful of growth this year despite the global slowdown. In 2008, apart from the 46 per cent growth in car sales at 3,625 units, it saw a 53 per cent jump in commercial vehicle sales (trucks and buses).