German luxury carmaker doubles down on top-end models and EVs as entry-level demand softens
14 Jan 2026 | 287 Views | By Prerna Lidhoo and Ketan Thakkar
With competition snapping at its heels, Mercedes-Benz India, the country’s largest luxury carmaker, plans to sustain its model launch excitement in 2026 to retain its lead. The company plans to launch 12 new models in the current calendar year and expects single-digit growth in a luxury car market weighed down ...
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With competition snapping at its heels, Mercedes-Benz India, the country’s largest luxury carmaker, plans to sustain its model launch excitement in 2026 to retain its lead. The company plans to launch 12 new models in the current calendar year and expects single-digit growth in a luxury car market weighed down by currency volatility and cautious consumer sentiment, even as demand for high-end vehicles and electric models remains resilient, senior executives said. The company did not reveal the details of the new models.
The German carmaker closed 2025 with sales of 19,007 vehicles, a marginal decline of about 2 percent year-on-year, but posted its highest-ever revenue in India, underlining a clear shift toward a richer product mix and higher average selling prices.
“Our average selling price has now gone up to around ₹1 crore. That clearly shows the kind of mix we are selling,” said Santosh Iyer, Managing Director and Chief Executive Officer of Mercedes-Benz India.
For 2026, the company’s launch pipeline spans internal combustion and electric powertrains, with a strong bias toward core and top-end segments, which now account for roughly 60 percent of its portfolio.
Mercedes-Benz said it will continue to avoid aggressive discounting in entry-luxury categories, even if that comes at the cost of volumes.
“We are not chasing volume for the sake of it. We would rather grow steadily and protect brand and residual values,” Iyer said.
Electric vehicles are expected to play a larger role in that strategy. EVs currently contribute around 20 percent of Mercedes-Benz India’s top-end sales, driven by favourable taxation and lower on-road prices compared with comparable petrol and diesel models.
“At the top end, EVs make strong sense for customers because of the GST advantage and the overall value proposition,” Iyer said, adding that luxury EV buyers increasingly assess purchases on total cost of ownership rather than range alone.
To support EV adoption, the company recently rolled out MB.Charge, a unified public charging platform that integrates access to over 9,000 DC fast chargers nationwide, allowing customers to locate, authenticate, and pay for charging through a single interface.
Despite these tailwinds, Mercedes-Benz remains cautious about the broader market outlook. Headwinds include a weak rupee against the euro, which continues to pressure costs, as well as muted luxury car demand amid geopolitical uncertainty and volatile capital markets.
“Luxury is a sentiment-driven purchase. Inquiry levels are healthy, but customers are taking longer to convert,” Iyer said.
Tailwinds include steady economic growth, rising numbers of high-net-worth individuals, and sustained interest in premium and ultra-luxury vehicles, particularly in metros, which account for roughly half of luxury car sales in India.
The company said it expects the luxury car market to expand at a low single-digit pace in the near term, with its own growth coming largely from premiumisation, new launches, and a gradual increase in EV penetration and revenues rather than purely volume-led expansion.
“We remain positive on the market, but growth will be calibrated and sustainable,” Iyer added.