Mercedes-Benz India to raise prices again in September, amid exchange rate fluctuations: MD Santosh Iyer
The German luxury maker also reiterated its earlier forecast of flat to single digit growth in India for 2025, amid exchange rates and geopolitical concerns.
'We have increased our prices in the range of 1-1.5% each in January and June. We have priced our cars for the rupee-euro exchange to be in the range 89-90. Now it has breached the 98 mark for the first time. 70% of our models have European content and therefore when the euro goes up the price of the models will go up,' Mr. Iyer said in a media interaction.
He was in Chennai for the inauguration of the Mercedes-Benz 'Atelier Experience' showroom from Sundaram Motors at Adyar in Chennai. Mercedes-Benz also launched itd EQS580 'Celebration Edition'.
'We cannot pass on the entire shock of price hikes to customers in one go. We have to do it in a phased manner. The price increase will have an impact on demand. That is why we have guided for flat to single-digit growth in 2025,' Mr. Iyer said.
He also said the repo rate cut by the Reserve Bank of India is a welcome step and would help increase demand.
'80% of our cars are bought on finance. Banks and our own financial arm have passed on the rate cuts. Despite the price increases, the EMIs have remained the same due to the rate cuts. The rate cuts increase demand for housing. Construction sector is one of the key segments for the luxury car market,' Mr. Iyer said.
He also pointed out that Mercedes-Benz has outpaced the market in terms of luxury car electric vehicle sales, driven by its top-end models.
'When you look at the combustion engine models there is a 48% GST and 20% road tax. Whereas in case EVs the GST is 5% and most States have exempted road tax and some have given 50% waiver on road tax. So some customers are seeing the benefits of buying an EV model,' Mr. Iyer said.
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