The luxury car manufacturer Mercedes-Benz India stated on Thursday that, as of April 1, all of its models, which range in price from Rs 2 lakh to Rs 12 lakh, will have higher prices to counter rising input costs, particularly the negative effects of foreign exchange. For the second time in three months, the company will increase the cost of its automobiles.
Starting on April 1, 2023, the company’s model line will have an ex-showroom price rise of up to 5%. Santosh Iyer, managing director and chief executive officer of Mercedes-Benz India, told PTI that his company has been monitoring the Euro and has seen a recent decline in the value of the Rupee relative to it. “It (the Euro) was roughly 78–79 (to a Rupee) in October, and it is currently 87. It is really putting pressure on us, and if we don’t take this aggressive action right away, our entire business model in India would suffer “said he.
As a result, starting in April, prices for the company’s top-tier S 350d limousine, A-Class limousine, GLA SUV, and top-tier Mercedes Maybach S 580 would all increase by Rs 2 lakh and Rs 7 lakh, respectively. After raising rates by as much as 5% in January, this will be the company’s second price increase of the year.
Apart from the Rupee depreciation compared to the Euro, there has been an increase in input costs including logistics, which have been exerting significant pressure on the company’s overall operational cost, Mercedes-Benz India said. In order to lessen the impact of the price hike on customers, Iyer said Mercedes-Benz India has taken steps through its financing solutions. “About 80 per cent of the cars sold are on finance…
So, we have come up with certain agility products now, with the residual value of the product is guaranteed, and the EMI impact will not be more than Rs 2,000 to Rs 3,000,” he added. When asked if the price hike could dampen demand, he said, “Of course price increases definitely have a tendency to have an effect on demand but we still feel with a very good first quarter start, we are still cautiously optimistic about a double-digit growth forecast for the year as well.
” If at all there is any impact on demand, Iyer said, “We feel they should be mitigated by the financing programmes we are offering.” In 2022, Mercedes-Benz India posted its best ever sales at 15,822 units, as compared to 11,242 units in 2021 at a growth of 41 per cent.