Mercedes-Benz India is considering a 1–1.5% price hike across all segments in the coming months to offset continued cost pressures stemming from the weakening rupee against the euro. This would be the third price revision this calendar year for the German carmaker, which leads India’s 50,000-odd units annual luxury car market
Santosh Iyer, managing director & CEO of Mercedes-Benz India, said the company had priced its models when 1 euro was around ₹89–90, but the currency has now breached the ₹99 mark and is inching closer to ₹100.
“70% of our cars in India still have European content. Therefore, when the euro goes up, the price will go up,” Iyer said. He was speaking on the sidelines of the launch of the Mercedes-Benz EQS 580 4MATIC sedan special edition and the inauguration of the ‘Atelier Experience’ retail showroom by Sundaram Motors in Chennai.
Iyer said the company had already implemented a 1.5% price increase in January and again in June this year. “The third one will come in September because we don’t want to pass on the entire shock to the market in one go,” he added.
He acknowledged that the price hike would impact demand, which is why the company is projecting flattish or single-digit growth for the year. “We never thought this (rupee depreciation against the euro) would happen because till three months back, it was at ₹90 — at much lower levels. So suddenly, this will affect car prices of German and European carmakers for sure,” he said.
However, Iyer noted that the impact of the price hike would be partially offset by lower interest rates following the Reserve Bank of India’s sharper-than-expected 50-bps repo rate cut to 5.5% earlier this month.
“If you look at June, the price of cars has gone up but the EMIs have remained the same. So, the interest rate reduction is helping for sure,” Iyer said.
Around 80% of luxury cars — including those from Mercedes-Benz — are financed. Iyer said the company’s non-banking financial company (NBFC0 arm, like other banks and NBFCs, has also passed on the rate cut benefits to customers through lower interest rates.
Mercedes-Benz India reported its highest-ever annual sales in FY25, delivering 18,928 vehicles, driven by strong demand for top-end models, battery electric vehicles (BEVs), and a revamped retail strategy.
Iyer also pointed out that BEVs are fuelling growth in the luxury segment, with industry volumes rising 66% in the first five months of calendar year 2025 to cross the 2,000-unit mark. Mercedes-Benz India’s own EV sales grew 73%, with EVs now accounting for 11% of its overall sales. “11% of all luxury cars sold today in India are EVs, from 7% last year,” he said.
The top-end luxury showroom in Chennai is part of Mercedes-Benz India’s plant to add 30 touchpoints by the end of the year. Iyer said the company has inaugurated 11 new luxury touchpoints in CY2025, 19 more luxury touchpoints to be inaugurated in the next 5 months.
Mercedes-Benz India, which has an 100-acre production facility in Pune’s Chakan district, produces A-Class, C-Class, E-Class Long Wheelbase, S-Class, and Mercedes Maybach S 580 limousine, along with the electric vehicles– EQS 580 sedan, and EQS SUV 450.
