Key facts
- Mercedes-Benz India is confident of sustaining growth this year due to strong demand.
- The company plans a price increase to counter currency depreciation and rising costs.
- Mercedes-Benz India reported a 7% sales growth in Q1 CY2026.
- The company has introduced its first plug-in hybrid S-Class in India.
- Electric vehicle penetration in top-end vehicles is 20%, with overall EV penetration nearing 10%.
Mercedes-Benz India expressed confidence in sustaining growth throughout the current year, driven by robust demand despite prevailing macroeconomic challenges and geopolitical uncertainties. The company indicated that a price adjustment is anticipated to mitigate the impact of sustained pressure on the Indian Rupee and other escalating costs.
Earlier, the German luxury automaker's Indian subsidiary launched its first plug-in hybrid model, the new S-Class, in the domestic market with a starting price of Rs 2.20 crore. Bookings for this model are now open, with deliveries scheduled to commence in the December quarter of 2026.
Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, stated that the company's initial prognosis of growth for the year remains intact. He confirmed that the company is on track to deliver growth, including in the first half of the year, though he did not specify if it would be in the high single digits or lower. Iyer emphasized that demand continues to be strong despite global economic and geopolitical factors.
The company reported a 7% increase in total sales, reaching 5,131 units in the first quarter of CY2026, compared to 4,775 units in the same period last year. For the full CY2025, Mercedes-Benz India's total sales saw a slight decrease of 2.85% year-on-year, totaling 19,007 units compared to 19,565 units in the previous year. Conversely, the company achieved its best-ever fiscal sales in FY26, with 19,363 units sold, surpassing the 18,928 units sold in FY25.
Iyer noted that while the first half of 2026 numbers will provide some clarity, the market remains volatile due to macroeconomic, geopolitical, and exchange rate factors, making precise growth forecasts difficult. However, he highlighted positive indicators such as strong customer sentiment, increasing car purchases, rising average selling prices, and a significant increase in the company's top-end vehicle (TEV) share.
The penetration of electric vehicles (EVs) within the company's top-end vehicle segment now stands at 20%, with overall EV penetration approaching 10% and experiencing double-digit growth compared to the previous year. Approximately 27-28% of Mercedes-Benz India's total sales volume originates from its TEV segment, comprising cars priced above Rs 1.5 crore.
Mercedes-Benz India has already implemented two price increases this year and is considering a third, driven by sustained demand and positive market sentiment. The company's EV sales experienced a 10% year-on-year decline in the last fiscal, attributed to the temporary discontinuation of certain electric CBU imports. However, with the recent introduction of the new CLA, demand has surged, with the plug-in hybrid variant sold out until October-November.
Looking ahead, the company plans to expand its EV portfolio and is reinforcing a powertrain-agnostic strategy for the Indian market, offering customers options beyond electric, gasoline, and clean diesel, including plug-in hybrids. Despite disruptions from the West Asia conflict, supply chain and logistics have largely managed to meet demand, although at a higher cost. The company is actively adjusting its supply chain to address increased demand for models like the CLA, EVs, and diesel powertrains, which has led to waiting periods for certain vehicles.
Mercedes-Benz India aims to maintain its launch momentum, having already rolled out 8-9 of its 12 announced product launches for the year. The remaining launches will include both internal combustion engine (ICE) and electric vehicles.