Rupee slide fuels Mercedes-Benz price hike

Time of India

4 hours ago

Mercedes-Benz India faced a 13% increase in cost over the past year as the rupee continued to weaken against the euro, inflating the cost of imported parts.
The Indian arm of the German luxury carmaker, which imports about 70% of its components, responded with calibrated price hikes,
Santosh Iyer
, managing director, Mercedes-Benz India told ET.
Still, the automaker is noting a trend among Indian customers to splurge, not just on base luxury car models, but on bespoke customisations that often add ₹60 lakh to ₹1.5 crore to a car's price tag.
Mercedes-Benz India raised car prices twice this year—one in January and another in June—with a third planned for September, said Iyer. The rupee breached the psychologically significant ₹100 mark against the euro only earlier this week.
'We've only passed on about 3% to the market but the rupee depreciation has raised our costs by nearly 13%. The gap is getting harder to absorb,' he said.
Indian luxury car buyers are however undeterred by the elevated price tags. More than 70% of the company's top-end vehicles (TEV), priced above Rs1.5 crore, are being customised through its 'Manufaktur' programme, among the highest globally for Mercedes-Benz. Manufaktur is the cross-brand personalisation range for exclusive exterior equipment and high-quality interior equipment.
Mercedes
buyers in India are opting for hand-picked wood trims, exotic leather options, and bespoke paintwork, often pushing the price of already top-end vehicles like the AMG GT 63 or Maybach S-Class significantly higher.
On Friday, the company unveiled two new sports cars from its 'GT Family'—the Mercedes-AMG GT 63 4MATIC with a dealership price of Rs3 crore, and the track-focused Mercedes-AMG GT 63 PR at Rs3.65 crore.
"Customisation is not just about indulgence anymore; it's about value perception,' said Iyer. 'Customers see Nappa leather or special trim as worth the premium — even with the currency hit.'
The surge in personalised luxury comes even as Mercedes-Benz continues to localise high-volume models—from the A-Class to the Maybach S580—to buffer some of the forex impact.
The recently-launched E-Class sedan, for instance, features fully-localised glazing components for the first time, said Iyer. Still, high-value items like powertrains, infotainment systems, and electronics remain heavily Euro-dependent, making price hikes almost inevitable if the rupee remains at current levels.
Despite the higher prices, sales of TEV models grew at an estimated 10-12% on-year in the first five months of 2025. This was boosted by a mix of thriving capital markets, resilient consumer sentiment, and lower borrowing costs passed on through the automaker's captive non-bank lending company.
Recent reduction in interest rates by the Reserve Bank of India helped the NBFC to further cut the cost of borrowing, which it passed on to buyers.
'We are trying to mitigate that (higher prices of cars) with these special EMIs," said Iyer.