CNNMoney is reporting that Mercedes is about to open a plant in Chakan, India, that will produce 5,000 units per shift.

The Chakan plant, in the western part of India, will start producing cars in January of 2009. Even though, Mercedes declined to report on the size of the investment, their local media is reporting that it was around $56 million.

DaimlerChrysler management board member Thomas Weber said: “In terms of growth perspective, India is one of the most impressive for Daimler.”

He said the plant could also be used to make other brands like Chrysler and truck models, but added no decision had been taken on that yet. It would also be possible that they could open a 160-strong research unit in the southern city of Bangalore.

Mercedes currently makes about 2,000 cars annually in a leased facility, and sold 2,121 units in India in 2005, nearly doubling sales from the previous year. It sells its Mercedes-Benz S-Class, E-Class and C-Class sedans in India. It is still a growing market, but slowly, similar to China, India’s middle class is getting bigger and are willing to spend more on luxury items.