Mercedes-Benz to increase prices by Rs 2-12 lakh across models from April 1
Luxury car manufacturer Mercedes-Benz India has announced that it will increase the prices of its vehicles by up to Rs 12 lakh across various models from April 1, 2023. This is the second time in three months that the company has raised its prices, with the ex-showroom price of its model range set to increase by up to 5%. The move has been made to offset rising input costs, particularly the adverse impact of foreign exchange.
According to Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, the company has been tracking the Euro, and the Rupee has depreciated against it in the past few months. “In October it (Euro) was around 78-79 (to a Rupee) and now it is at 87. It is really putting pressure and if we don’t take this proactive step now, it will deteriorate our overall business model in India,” he said.
As a result, from April, prices of the company’s A-Class limousine will go up by Rs 2 lakh and GLA SUV by Rs 7 lakh for the top-end S 350d limousine, while the top-end Mercedes Maybach S 580 will see an increase in price by Rs 12 lakh. The company had already increased prices in January by up to 5%.
Apart from the Rupee depreciation compared to the Euro, there has been an increase in input costs, including logistics, which have been exerting significant pressure on the company’s overall operational cost, Mercedes-Benz India said. However, to lessen the impact of the price hike on customers, Iyer said that Mercedes-Benz India has taken steps through its financing solutions. “About 80% of the cars sold are on finance… So, we have come up with certain agility products now, with the residual value of the product guaranteed, and the EMI impact will not be more than Rs 2,000 to Rs 3,000,” he added.
When asked if the price hike could dampen demand, Iyer said, “Of course, price increases definitely have a tendency to have an effect on demand, but we still feel with a very good first-quarter start, we are still cautiously optimistic about a double-digit growth forecast for the year as well.”
In 2022, Mercedes-Benz India posted its best-ever sales of 15,822 units, compared to 11,242 units in 2021, representing a growth of 41%. If there is any impact on demand, Iyer said, “We feel they should be mitigated by the financing programs we are offering.”
The luxury car market in India has been growing steadily over the years, and Mercedes-Benz is one of the key players in this segment. With the price increase, the company hopes to maintain its profit margins despite rising input costs. While it remains to be seen how customers will react to the hike, Mercedes-Benz India is confident that its financing solutions will help ease the burden on them.