Mercedes-Benz India Set to Raise Prices by Up to 1.5% This September – Here's Why

Mercedes-Benz India is planning a price increase of 1% to 1.5% starting September, said Managing Director and CEO Santosh Iyer. This decision is mainly due to the Indian rupee’s weakening against the euro. The luxury car manufacturer has already raised prices twice this year—in January and again in July.

Currency Pressure Drives the Hike

Speaking in an interview, Iyer explained that the euro has stayed consistently high in value compared to the rupee over the past month. "The exchange rate has been stable at around 100 INR per euro, and that puts cost pressure on us," he said. Because of this, the company feels it must raise prices again in September to manage the growing costs.

Customer Impact and Demand Outlook

Despite higher prices, Iyer does not believe it will greatly impact sales. He explained that around 80% of their car buyers choose financing options. "With lower interest rates, the monthly payments (EMIs) remain manageable for most customers," he said. Even though the cars are becoming more expensive, the company is working to keep the EMI amounts steady, helping buyers cope with the increase.

He added that customer demand is still strong and people continue to purchase luxury vehicles, especially with India’s growing economy. Buyers also understand that exchange rates are out of the company’s control, he said.

Production and Market Growth

When asked about supply chain concerns, especially related to rare earth magnets used in electric vehicles, Iyer confirmed that Mercedes-Benz India has not experienced any disruptions. “Our teams in Germany have managed the situation well, and we currently have enough stock to avoid delays,” he assured.

However, Iyer did note that the company’s overall growth might remain flat this year due to global uncertainties, including geopolitical tensions. While the general car market is growing by about 2-3%, the luxury segment is performing slightly better with 5-6% growth. He concluded by saying that both regulations and currency changes are pushing up vehicle prices across all segments.