Mercedes-Benz India reports 1st sales decline in 5 years
What's the story
Mercedes-Benz India has reported its first sales decline in five years, with a 3% year-on-year (YoY) drop to 19,007 units in 2025. The decline is attributed to intense competition, currency-driven price hikes, stock market volatility, and geopolitical uncertainty. Despite the downturn in core segment sales, the company achieved record revenue due to strong demand for high-end models priced above ₹1.25 crore.
Market challenges
Price wars and exchange rate volatility impact sales
Santosh Iyer, the Managing Director and CEO of Mercedes-Benz India, said that the company has been affected by exchange rate volatility. This led to calibrated price increases throughout the year. He also talked about a "price war" in the entry segment of the market, cars priced around ₹50 lakh, and a conscious decision to avoid such wars as they hurt residual values and brand equity long-term.
Competitive landscape
BMW and Jaguar Land Rover outperform Mercedes-Benz
Despite the challenges, Mercedes-Benz held on to its leadership position with about 36% market share. However, rival BMW is closing in with a 34% share in calendar year 2025. BMW India sold 18,001 units in 2025, a whopping 14% increase year-on-year. The growth was attributed to new model launches and strong demand for EVs. Jaguar Land Rover (JLR) India also witnessed a strong momentum with registrations rising by an impressive 22%.
Market pressures
Affordability concerns for 1st-time luxury buyers
Iyer acknowledged that while demand for luxury cars remains strong, affordability, especially for first-time luxury buyers, has come under pressure. He said this is being addressed through innovative financing solutions. A sustained acceleration in demand will depend on improved sentiment, currency stability, and renewed confidence among first-time buyers. Despite the volume decline, Mercedes-Benz posted its best-ever performance in India in revenue terms due to a richer product mix.
Market expansion
India becomes top 5 global market for Mercedes-Maybach
India entered the top five global markets for Mercedes-Maybach for the first time in 2025. This prompted the company to start local production of the Mercedes-Maybach GLS. India is the first market outside the US to assemble this ultra-luxury SUV, which has reduced its entry price while maintaining high levels of customization. Despite strong performance at the top end, the overall luxury car market remains range-bound at around 50,000 units annually.