Mercedes Expands Luxury Playbook, Adds V-Class to Strengthen Top-End Portfolio

Mercedes-Benz India has expanded its portfolio beyond sedans and SUVs with the launch of the V-Class, betting that a white space in the luxury MPV segment can drive incremental growth without diluting brand equity.

The German carmaker has introduced the luxury MPV at an introductory price of ₹1.4 crore. The model will initially arrive as a completely built unit (CBU) and will transition to local assembly in Pune before the end of the year.

For Santosh Iyer, Managing Director and Chief Executive Officer, the launch is less about chasing volumes and more about expanding the addressable luxury market.

“There is a clear white space in the van market,” Iyer told Autocar Professional on the sidelines of the launch. “We have seen demand from our own customers who travel to Europe and the US and ask when we will bring a van here.”

Mercedes had offered a V-Class in 2019. But Iyer said the market was not ready then. The luxury MPV segment was smaller. The earlier model was diesel-only and not fully configured for Indian preferences.

“This time, we wanted to get the product configuration right,” he said.

Filling The Gap

The new V-Class comes with features tailored for privacy and comfort. It offers luxury seats, Airmatic suspension, heat-insulating glass, blinds for rear passengers, and a 15-speaker, 640-watt Burmester surround sound system. 

The luxury MPV also comes equipped with seven airbags and advanced driver assistance systems such as Active Lane Assist and DISTRONIC. The company said the vehicle has an occupant protection score of 93 percent and positions it as the safest car in its segment.

In India, the V-Class is offered with two engine options. The petrol variant produces 170 kW and is supported by integrated starter generator (ISG) technology that adds a 15 kW boost. The diesel engine delivers 174 kW. Mercedes says these are key requirements for its core clientele.

The company also worked the pricing strategy carefully. If imported entirely as a CBU, the V-Class would have been priced close to ₹2 crore.

“The vacant space is between ₹1 crore and ₹2 crore,” Iyer said. “We felt ₹1.5 crore was the right price point. With localisation, we could introduce it at ₹1.4 crore.”

The idea is to expand the luxury car market rather than cannibalise existing models. “This will not be the only car in the family,” Iyer said. “It will be the second, third or even fourth luxury car in the garage.”

Mercedes expects triple-digit annual volumes once the model stabilises. “There would be certain triple-digit volumes that we are looking at,” Iyer said. “That is why we are localising. It cannot be very low.

In India, Mercedes’ V-Class will lock horns with the likes of Toyota’s Vellfire and Lexus LM in the luxury MPV segment. While Vellfire, offered primarily as a hybrid-petrol luxury MPV, has been a strong choice among chauffeur-driven buyers with its premium interiors and expansive cabin,   Lexus LM occupies the ultra-luxury space with prices well above ₹2 crore, appealing to buyers seeking bespoke MPV comfort.

India’s luxury car market has traditionally been sedan- and SUV-driven. Iyer believes there is room for an MPV as a secondary luxury vehicle.

“A lot of customers want a primary car as a sedan or SUV,” he said. “But they want a second car for airport shuttles, farmhouses, weekend travel or even working while on the move.”

He sees demand largely from personal buyers rather than corporate fleets. Affluent families and business leaders who value privacy and comfort are expected to form the core audience.

Part Of Broader Premiumisation Push

The launch aligns with Mercedes’ broader strategy of strengthening its top-end portfolio. One in four Mercedes cars sold in India now comes from the top-end segment. That segment grew 11 percent last year, reflecting rising premiumisation and appetite for exclusivity.

Mercedes closed 2025 with sales of 19,007 vehicles, a marginal decline of about 2 percent year-on-year. However, it recorded its highest-ever revenue in India. The richer product mix drove higher average selling prices.

“Our average selling price has now gone up to around ₹1 crore,” Iyer had said earlier. “That clearly shows the kind of mix we are selling.”

The company expects single-digit growth for the ongoing financial year. January and February were steady. But price increases in January and another planned in April could weigh on demand.

“We are not chasing volume for the sake of it,” Iyer said. “We would rather grow steadily and protect brand and residual values.” Mercedes plans to launch 12 new models this calendar year across internal combustion and electric powertrains, with a strong bias toward core and top-end segments.

Supply Chains, Electrification

On geopolitical uncertainty and supply chain risks, Iyer said the company has built buffers. “The business environment is always challenging,” he said. “But we have managed it well. Even now, we believe the current crisis may be short-term.”

Meanwhile, electrification remains part of the company’s long-term roadmap. Globally, Mercedes is developing new electrified vans. However, there is no immediate plan to introduce a fully electric V-Class in India.

“We will evaluate once the global car is launched,” Iyer said. “Nothing for this year.”

The petrol V-Class features mild-hybrid technology. A plug-in hybrid variant is not under consideration at present.

Mercedes-Benz India’s current portfolio spans a wide range of luxury segments. On the SUV front, it offers the GLA, GLC, GLE, GLS and the ultra-premium off-road luxury SUV G-Class. In the sedan lineup, models such as the A-Class, C-Class, E-Class and S-Class cover entry-level to flagship comfort and executive segments. The company also reinforces its high-end appeal with Maybach variants, including the locally assembled Maybach GLS. With the addition of the V-Class, Mercedes has now extended its range to include premium multi-purpose vehicles.

Expanding The Luxury Map

The V-Class is a calculated expansion. It plugs a portfolio gap. It deepens engagement with affluent families and high-net-worth individuals. And it reinforces Mercedes’ tilt toward high-value growth rather than pure scale.

At ₹1.4 crore, it sits above premium MPVs that drive volumes in lower price bands. Mercedes is not positioning it as a direct competitor to those products. “There should be enough space for everybody to grow the market,” Iyer said.

In a market where growth is moderating but premiumisation is accelerating, Mercedes is betting that diversification at the top end will sustain its leadership.