Despite the series of shocks including the latest West Asia conflict and the resultant supply chain disruptions & rising crude oil prices, India’s luxury car market remains resilient, with demand continuing to outpace broader industry expectations

The ongoing crisis has had only a limited impact on the luxury vehicle segment, highlighting the sector’s ability to withstand external economic shocks said Santosh Iyer, Managing Director & CEO, Mercedes-Benz India in an interview. 

He said consumer demand remained robust, with buyers continuing to purchase high-end vehicles despite global uncertainties. And having already increasing price twice this year, the company is gearing up for another price hike to offset rising cost pressure. 

“These crises are now becoming a way of doing business. Ever since Covid, supply chain, semiconductor crisis and so on, we have been navigating through multiple topics. But overall growth is still there, we still see a momentum in the market, consumers are still buying cars, sentiment depends on weeks not months,” he said.

“Mercedes-Benz was the only luxury carmaker to post growth in the first quarter of the year,” he emphasised.

The company, by far the luxury car segment market leader, continues to maintain its forecast of single-digit growth for 2026 reflecting confidence in market momentum and customer sentiment.

While demand has remained unaffected, the crisis has created operational challenges, he stated.

“Rising logistics and supply chain costs, coupled with rupee depreciation, have increased input expenses. We have already implemented two price hikes this year—in January and April—and evaluating another increase to offset cost pressures,” he said.

On the changed business scenario he said, “We have to now manage our business on a monthly, weekly, quarterly basis now. Gone are the days where you can do a long term planning. May be this crisis [West Asia conflict] currently is over but there will be something else coming on the way.”

“So flexibility is the core, thankfully our production, our supply chain all are flexible on powertrain options. On the demand side we are able to adjust based on what the market needs,” he stated.

He said the company has successfully managed supply chain disruptions, ensuring steady vehicle and spare parts availability. 

Some models, including the CLA, have already been sold out for the year, underlining strong customer interest, he said.

The luxury carmaker also remains optimistic about its top-end vehicle portfolio, led by the iconic S-Class. 

“Top-end vehicles account for 27% of Mercedes-Benz India’s sales, while electric vehicles contribute around 20% of sales in this segment,” he added.

The company recently introduced a plug-in hybrid variant of the S-Class in India, offering nearly 100 km of electric-only driving range and catering to customers seeking electrification without fully transitioning to battery-electric vehicles.

Looking ahead, Mercedes-Benz expects both the luxury car industry and its own business to continue growing this year, despite ongoing geopolitical and economic headwinds.

With intense competition in the entry-level of the luxury car market in India, even from non-luxury brands in the sub ₹50 lakh segment, Mercedes-Benz India has decided to focus on value over volume and concentrate on the top end of the luxury car segment where margins are better.

In 2025, the company reported 3% de-growth in volume by selling 19,007 units as compared with 19,565 units sold in 2024.

The volume of 2025 was backed by 11% growth in the Top End Vehicle (TEV ) segment, 12% growth in Battery Electric Vehicles (BEVs), and the company clocked the ‘best ever year’ in terms of revenue.

The AMG portfolio grew by 34% powered by demand for AMG G63, AMG CLE53 and AMG GLC43.

Mercedes-Benz BEVs now comprise 20% of all top-end Mercedes-Benze sold in India. 70% of all Mercedes-BEVs sold in 2025 were priced between ₹1.25 crore to ₹3.10 crore, establishing a strong customer preference for top-end BEVs in the luxury segment, the company said. 

Santosh Iyer, Managing Director and CEO, Mercedes-Benz India, said, “We have delivered another best-ever year in terms of revenue growth, buoyed by high affinity amongst discerning customers, reflected in the strong growth in the TEV segment as well in top-end BEVs.

“Our strategy of focusing on ‘value over volume’ and offering high product substance keeps the customer experience at the core, while ensuring customers continue to enjoy a feature-rich product and retain high Residual Value for their Mercedes-Benz,” he said. 

“2026 will be an action-packed year with 12 new product introductions, expansion of our local production portfolio, the launch of the MB.Charge Public, expansion into new markets and investment in upgrading our entire network,” he added. 

Mercedes-Benz India kick-started 2026 with the launch of the Mercedes-Maybach GLS ‘Celebration Edition’ priced at ₹4.10 crore. 

It has also launched the EQS SUV ‘Celebration Edition’ starting at Rs. 1.34 crore (5-seater) and Rs 1.48 crore (7-seater). 

The company has also rolled out ‘MB. Charge Public’, one of the largest and most established public charging networks present in 37 countries.

It provides customers complete end-to-end integration flow — from finding a charging point to the payment process — in a single ecosystem. 

This service will be accessible at over 9,000 DC charging points to all existing Mercedes-Benz BEV customers at no extra cost.

The car maker on Wednesday (January 14) launched its first-ever ‘Sustainability Compendium Report 2026’ underpinning the diverse corporate citizenship the company undertakes, positively impacting the lives of people.

The company has announced to start the local production of the Mercedes-Maybach GLS, which will bring down the price of the SUV to ₹2.75 crore.

This marks a significant milestone in the brand’s manufacturing capabilities in India, making India the first market outside the US to locally produce the ultra-luxury Mercedes-Maybach GLS. 

“India now features in Mercedes-Maybach’s top 5 global markets, underlining our strong focus on top-end vehicles, making us the most desirable luxury automotive brand. Local production will further enhance the vehicle’s appeal, reiterating our world-class manufacturing prowess and agility, catering to the most demanding customer wishes for such exclusive top-end vehicles,” the CEO said. 

Mercedes-Benz India said in 2026 it would enhance its presence with 15 new luxury touchpoints in 2026 in 3 new markets, and enhance 15 existing touchpoints according to new architecture standards.