Mercedes-Benz India announces third price hike of 2025, effective September
What's the story
Mercedes-Benz India is planning to increase its vehicle prices by 1-1.5% from September. Santosh Iyer, MD and CEO of Mercedes-Benz India, confirmed this in an interaction with PTI. The move comes as a response to the weakening of the Indian rupee against the euro. The company has already raised prices twice this year—in January and July.
Strategy
Upcoming price hike due to euro's performance
Iyer explained that the upcoming price hike is mainly due to the euro's performance. He said, "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."
Market response
Will price increase affect sales?
Iyer was asked if the price increase would affect sales. He said that lower interest rates are somehow balancing monthly payments for buyers in equated monthly installments (EMIs). He noted that around 80% of the company's new car sales are financed. "So, when you look at the EMIs, we have tried to keep the same, though the price of the car has gone up," he said.
Market resilience
Iyer believes there is still demand in the market
Despite the price hike, Iyer believes there is still demand in the market. He said that with a growing economy, people would want to buy luxury cars. Buyers understand that prices are beyond the company's control due to currency fluctuations. He also dismissed concerns over production issues due to rare earth magnets, saying they have sufficient stocks and are managing well.
Future prospects
Company's growth could be flat this year
Iyer said that the company's growth could be flat this year due to geopolitical issues and other challenges. He noted that while the overall passenger vehicle market has grown by 2-3%, the luxury car segment has outperformed with a growth rate of around 5-6% this year. "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," Iyer added.