Mercedes-Benz India is preparing for a series of phased price increases across its product portfolio in the next calendar year as it grapples with the sustained depreciation of the Indian rupee against the euro, a development that has significantly raised its cost base. The luxury carmaker has already announced that it will increase prices of its vehicles by up to 2 per cent from January 1, 2026, but this is expected to be only the first step in a broader pricing strategy aimed at offsetting ongoing foreign exchange pressures.
Speaking on the sidelines of the launch of the FICCI Mercedes-Benz Bharat Innovation business ideas challenge programme, Managing Director and CEO Santosh Iyer said the company is actively considering price hikes on a quarterly basis throughout 2026. He attributed this decision primarily to the sharp and persistent weakening of the rupee against the euro, which has remained above the Rs 100 mark for most of 2025. This level, he noted, is significantly higher than historical averages and has created sustained cost pressures for the company, given its exposure to imports and euro-linked components.
Iyer highlighted the magnitude of the currency movement to underline the challenge faced by the company. Around 18 months ago, the exchange rate was in the range of Rs 89 to a euro, whereas it has now climbed to about Rs 104–105. This represents a depreciation of more than 15–18 per cent, which directly impacts the landed cost of imported vehicles, completely knocked-down (CKD) kits, components, and other inputs sourced from Europe. For a premium automotive brand like Mercedes-Benz, where a significant portion of the value chain is linked to global supply networks, such forex movements have a material impact on profitability.
