The C220 CDI is powered by a 2.2-litre diesel engine that churns out 169bhp. The C220 CDI diesel will be equipped with high-end features such as 8.4-inch touchscreen display with COMAND infotainment system, 13-speaker Burmester audio system, advanced automatic climate control, etc.

The C220 CDI will face competition from Audi A4 sedan, BMW 3-Series.

Recently, Mercedes-Benz launched CLA Class sedan, priced in the range of Rs 31.5-35.9 lakh (ex-showroom Delhi), to further strengthen its position in the country.

The car will be available in both diesel and petrol options in three variants with prices ranging from Rs 31.5 lakh to and Rs 35.9 lakh (all prices ex-showroom Delhi).

The company plans to introduce 15 new products in India this year, and pump in Rs 150 crore for adding a new assembly line for its upcoming CLA compact sedan at the Chakan facility.

"Mercedes-Benz will introduce 15 products in 2015, including products with no predecessors in India. These new products are Mercedes-Benz India's biggest product initiative till date," the company had said in a statement.

Mercedes-Benz reported 13 percent increase in annual sales in India in 2014 at 10,201 units, driven by new launches and network expansion. It had sold a total of 9,003 units in 2013.

The company launched various models including flagship S-Class, E 350 CDI sedan and the all new C-Class during last year.