Daijiworld Media Network – Bengaluru
Bengaluru, Dec 12: German luxury carmaker Mercedes-Benz on Saturday announced that it will increase prices across its entire model lineup by up to 2%, effective January 1, 2026, citing the sharp depreciation of the Indian rupee this year. The company said persistent forex pressure throughout 2025 has forced a fresh revision.
Mercedes had already raised prices by around 3.5% to 4% earlier this year. Industry analysts expect other luxury carmakers to follow suit with additional revisions soon.
“Currency headwinds have persisted longer than anticipated, with the euro consistently above the INR 100 mark. This prolonged volatility impacts everything—from imported components for local production to completely built units,” said Santosh Iyer, Managing Director & CEO, Mercedes-Benz India.
The rupee has weakened around 6% against the US dollar in 2025, while the fall against the British pound and the euro has been in double digits. India imports a majority of luxury cars and components from Germany and the UK, making the segment particularly vulnerable to currency fluctuations.
Mercedes-Benz said forex volatility has significantly increased supply-chain costs for both CKD (completely knocked-down) and CBU (completely built-up) units. Despite its aggressive localisation strategy absorbing much of the additional cost, a selective price adjustment has become necessary to ensure operational sustainability.
Apart from currency factors, rising material costs, inflation, and higher logistics expenses have also contributed to the upward price revision. “RBI’s continuous repo rate reduction has enabled Mercedes-Benz Financial Services to pass on benefits to customers, offsetting the price impact to a large extent,” Iyer added.
Mercedes-Benz is among the first carmakers to announce a price hike after the September GST revision on passenger vehicles, which brought taxes on luxury cars down to 40% from the earlier 45–50%. Following the change, the carmaker had reduced prices across several models.