Key Highlights :
Mercedes-Benz India to roll out a 1–1.5% price hike in September 2025.
Rupee depreciation against the euro cited as the primary justification for the hike.
EMI effect anticipated to be nil with reduced finance rates and consistent demand.
Key Background :
Mercedes-Benz India’s third price hike of the year is an indication of rising cost pressures due to rupee depreciation. With the euro remaining at around ₹100, higher import expenses for finished vehicles and components as a drag on the company. To offset these pressures against profitability, Mercedes-Benz has decided to hike prices incrementally on a year-round basis.
The premium car manufacturer is famous for imported as well as locally produced luxury cars in India. However, the aspect that most of its portfolio is dependent on imports makes foreign exchange rate volatility impact pricing policies directly. By capping each successive round of hikes by modest percentages, the company is trying to hold the line between affordability and safeguarding its margins.
Financing is one of the most important aspects of the Indian premium car industry wherein almost 80% of cars are bought on finance. The recent reduction in interest rates has acted to neutralize increasing expenses, keeping monthly payments for most buyers under control. It has helped Mercedes-Benz to sustain demand without compromising customer satisfaction.
On the market dynamics front, luxury automobiles continue to witness a more robust rate of growth compared to the entire passenger vehicle industry. While Indian automobile sales overall are expanding at 2–3%, growth within the luxury cars category has been 5–6% in the year, which is in line with mounting demand for premium mobility on the part of high-net-worth individuals.
Mercedes-Benz India has also covered the issues regarding the possibility of supply chain disruption in EVs, especially the shortage of rare earth magnets. The company ensured that it is well-stocked and has not encountered any major problems in procuring critical components, because of proper planning and global coordination.
In spite of a robust product portfolio and robust demand, the company is guarded. Global economic uncertainty and geopolitical tensions have the potential to impact second-half performance. Luxury business is fine at present, but overall growth for 2025 is forecast to be flat, which is indicative of a more cautious business outlook owing to turbulence outside.