Why is Mercedes-Benz India Increasing Car Prices by Up to 2%?
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Synopsis
Mercedes-Benz India is set to raise car prices by up to 2% starting January 1, 2026, due to rising operational costs and forex challenges. With 80% of customers financing their purchases, the company aims to limit the impact on buyers while absorbing most additional expenses.
Key Takeaways
- Mercedes-Benz India will increase prices by up to 2%.
- The price rise is effective from January 1, 2026.
- Operational costs and forex pressures are the primary reasons.
- Mercedes-Benz is absorbing most of the cost increase.
- Flexible financing options will be available to customers.
New Delhi, Dec 12 (NationPress) Mercedes-Benz India has officially declared that it will raise the prices of all its models by up to 2 percent, effective January 1, 2026. The company cited the need for this price adjustment due to increasing operational costs and ongoing foreign exchange difficulties experienced throughout 2025.
According to the luxury car manufacturer, the price adjustment, limited to 2 percent, is a direct result of persistent foreign exchange pressures that have impacted the luxury automotive sector throughout the year.
The Euro has consistently traded above the Rs 100 threshold for the majority of the year, significantly higher than previous averages, thus intensifying financial strain on the company.
Mercedes-Benz India indicated that the robust Euro influences all areas of its operations, which includes costs associated with imported parts for locally assembled vehicles, as well as completely imported cars.
The company further stated that rising costs for inputs and materials, higher logistics expenses, and overall inflation have escalated its total operational costs.
Managing Director and CEO Santosh Iyer mentioned that the currency situation has been more challenging and prolonged than initially anticipated.
Despite facing considerable cost pressures, the company is transferring only a fraction of this burden to consumers.
To minimize the impact of the price increase, Mercedes-Benz is absorbing a significant portion of these additional costs.
Mercedes-Benz Financial Services (MBFS) will continue to provide flexible financing options to assist customers in managing the effects of the price rise.
Given that 80 percent of Mercedes-Benz buyers in India utilize financing, and MBFS supports nearly 50 percent of the brand's total sales, these financial solutions are anticipated to alleviate the overall burden on customers.
The company also noted that recent cuts in the Reserve Bank of India’s repo rate have enabled MBFS to pass on benefits to buyers, significantly mitigating the impact of the price increase.
Point of View
I observe that Mercedes-Benz's decision to increase prices reflects broader economic challenges in the luxury automotive market. While this move is understandable given the operational costs and forex pressures, it remains crucial for the company to balance cost absorption with customer affordability to maintain brand loyalty.
NationPress
14/12/2025
Frequently Asked Questions
Why is Mercedes-Benz increasing car prices?
The increase is due to rising operational costs and sustained foreign exchange challenges.
When will the price increase take effect?
The new prices will be effective from January 1, 2026.
How much will the prices increase?
Prices will increase by up to 2 percent across all models.
What is Mercedes-Benz doing to help customers manage this increase?
Mercedes-Benz Financial Services will continue to offer flexible financing plans.
How many buyers use financing for their purchases?
Approximately 80 percent of Mercedes-Benz buyers in India opt for financing.
