"Though still at a medium level, demand in India has increased in the last couple of years and we are optimistic. Positive factors include the growth in the economy and increased efforts at infrastructure development, including good roads," Joachim Schmidt, executive vice-president, Mercedes Car Group, said at the ongoing 75th Geneva Motor Show.

Even as volumes in the Indian car market are accounted primarily by low-priced hatchbacks, premium cars, where Daimler's cars are big contenders, have seen demand rising.

"We are happy to have brought the first luxury brand to India by setting up a plant," Schmidt, responsible for global sales and marketing, said, adding that quality of cars produced in India was today at par with those made in Germany.

DaimlerChrysler entered India in the year 1994 and assembles cars at its plant in Pune.

The company, which sources auto parts from India, is also looking to launch its 'Actros' range of heavy truck, directly in competition to Sweden's Volvo, which has been in the Indian markets for some years now.