If you are preparing to buy a car in the new year, then you may have to buy it at an expensive price. In this sequence, Mercedes-Benz India has announced to increase the prices of its vehicles by a maximum of 2% from January. According to the news, the company has cited rising operating costs and continued weakness of the Indian rupee against the Euro as the main reasons for this price revision. According to the company, this limited price increase reflects the foreign exchange pressures on the luxury automobile industry in 2025.
Main challenges facing companies
- Weak Rupee: According to Santosh Iyer, MD and CEO of the company, currency challenges have persisted longer than we expected. The Euro continues to trade above ₹100, creating long-term volatility.
- Rising costs: Rupee weakness is making imported components (be it for local production or fully built CBU vehicles) costlier.
- Pressure on supply chain: The Pune-based company said that the current forex scenario has created huge cost pressure in the supply chain.
- Other Input Costs: Rising input costs, commodity prices, logistics expenses and general inflation are also putting pressure on the company’s profitability.
Company’s stance and customer relief
The company also clarified that its localization strategy has helped offset a large portion of the cost increase, but this price adjustment has been necessary to ensure long-term sustainability of operations. Providing relief to customers, Iyer said that due to continuous reduction in repo rates by RBI, Mercedes-Benz Financial Services is able to provide relief in interest rates to customers. This will reduce the impact of price increase to a great extent.
industry trends
Mercedes-Benz India is not alone in raising prices due to rising costs. According to sources, earlier BMW India had also announced plans to increase prices of its vehicles from January citing the rupee weakness, which reflects rising cost pressures in the industry. There is also a possibility that domestic companies may also stand in this queue soon. Therefore, buying cars can become expensive from the beginning of the new year.
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