Mumbai: Mercedes-Benz India on Friday announced that it will increase the prices of its vehicles by up to 2% starting January, citing rising raw material costs, higher logistics expenses, and sustained volatility in the euro–rupee exchange rate. The luxury automaker said the adjustment is necessary to offset mounting operational pressures, although it will continue absorbing a major share of the increased costs.
Forex volatility pushes operational costs up
According to the company, the euro has consistently traded above the ₹100 mark throughout 2025, significantly impacting input costs for locally produced vehicles as well as completely built units imported into the country.
“This prolonged volatility affects every aspect of our operations — from imported components for local production to completely built units,” said Santosh Iyer, Managing Director and CEO of Mercedes-Benz India. He added that the company’s intent is to balance business sustainability with customer convenience.
Quarterly price revisions likely
Mercedes-Benz India also indicated that it is evaluating quarterly price adjustments in 2026 to better align with global currency movements. The company highlighted that despite the current hike, it continues to shoulder most cost pressures while passing only a modest portion to buyers.
The upcoming price rise is expected to apply across models, including its popular SUVs, sedans, and AMG performance range.
Mercedes leads India’s luxury car market
In India’s growing luxury vehicle segment, Mercedes-Benz maintains a strong lead over competitors such as BMW and Jaguar Land Rover (owned by Tata Motors Passenger Vehicles). The company has reported consecutive years of sales growth driven by expanding demand in major metros and Tier 1 cities, supported by an increasing appetite for premium SUVs and electric vehicles.
Industry analysts note that input cost inflation and foreign exchange fluctuations have posed challenges for all luxury automobile brands, potentially paving the way for similar price adjustments by rivals.
Growing market but rising pressures
While India remains one of the fastest-growing luxury car markets globally, fluctuations in commodity prices, rising logistics costs, and foreign exchange movements continue to influence pricing decisions. Manufacturers have been adopting periodic price revisions to manage pressure on margins without hampering long-term product plans.
Mercedes-Benz India said the January increase is part of its efforts to maintain product quality, support dealer networks, and ensure a robust supply chain amid global uncertainties.