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Mercedes-Benz India has announced plans for another price hike, expected to take effect in September 2025. This upcoming increase, ranging between 1 to 1.5 per cent, is aimed at offsetting the effects of a persistently weak Indian rupee against the euro, according to Managing Director and CEO Santosh Iyer.

The brand, which leads the domestic luxury vehicle segment, has already raised prices twice this calendar year—once in January and again in July. Speaking to PTI, Iyer stated, “There is another price hike coming up in September, because of the euro. If you see, the last one month has remained at the 100 mark (INR), and that has not changed. Therefore, we will have to undertake an increase as well in September.”

EMI Stability Helping Offset Customer Impact

When asked whether repeated price revisions might deter customers, Iyer pointed to steady demand and supportive financing conditions. He noted that with interest rates on the decline, the impact on monthly instalments for customers has been minimal. “Around 80 per cent of the company's new car sales are financed,” he said. “So, when you look at the EMIs, we have tried to keep the same, though the price of the car has gone up. So, that helps us to mitigate the impact of price increase to a large extent.”

He further added that customers today are more accepting of such hikes, particularly when they stem from currency volatility—factors largely outside the automaker’s control.

Supply Chain and Growth Outlook Remain Stable

On the supply front, Mercedes-Benz India does not foresee disruptions related to rare earth magnets, a component critical to electric and hybrid vehicle manufacturing. “If you look at the supply chain, as far as we are concerned, we are not affected yet by any of these topics, because we are managing it well,” Iyer explained. “We also have sufficient stocks with us, so we are able to navigate and manage it.”

While noting that growth for the brand may be "flattish" this year, Iyer pointed out that the luxury car segment as a whole is growing at a faster pace—approximately 5 to 6 per cent—compared to the broader passenger vehicle market, which is expanding at 2 to 3 per cent.

“Of course, one would love much higher growth rates, but considering what's happening worldwide geopolitically, I think growth in the automotive industry by itself is a positive sign as such,” he said. He also acknowledged that rising average selling prices in both mass and luxury segments are being driven by regulatory changes and currency movement, respectively.