Mercedes-Benz India will implement a price correction of up to 2% across its entire model range effective January 1, 2026, driven by sustained forex pressures, rising input costs, and increased logistical expenses that have created pressure on operational costs throughout 2025.
The adjustment comes as the Euro-INR exchange rate has consistently traded above the INR 100 mark in 2025, representing a significant deviation from historical averages. This currency environment has created substantial cost pressures across the supply chain, affecting both imported components for local assembly and completely built units (CBUs).
"Currency headwinds have persisted longer than we anticipated this year, with Euro consistently trading over INR 100 mark. This prolonged volatility affects every aspect of our operations, from imported components for local production, to completely built units. In addition, rising input costs, increasing logistical expenses, in combination with inflationary costs have significantly risen our overall operational costs," said Santosh Iyer, Managing Director & CEO, Mercedes-Benz India.
The company stated it is absorbing the majority of cost pressures and passing only a nominal portion to the market. The adjustment quantum will vary by model based on local content versus import dependency.
Mercedes-Benz India is considering further quarterly price adjustments to align closer with current forex levels.
Financial Services to Offset Impact
Mercedes-Benz Financial Services (MBFS) has developed tailored financial products to mitigate the EMI impact from the price adjustment. With 80% of Mercedes-Benz purchases in India involving financing, and MBFS directly facilitating approximately 50% of total brand sales, the company's financial arm plays a significant role in the ownership ecosystem.
"Thanks to RBI's continuous repo rate reduction, enabling Mercedes-Benz Financial Services to pass on the benefits to end customers, thereby mitigating price increase effect to a large extent," Iyer added.
The company has a production facility spread over 100 acres in Chakan near Pune and operates over 140 luxury touchpoints across 50+ cities in India.