Luxury carmaker Mercedes-Benz India on Thursday said it will increase prices of its vehicles ranging between Rs 2 lakh to Rs 12 lakh across different models from April 1, to offset rising input costs specially the adverse impact of foreign exchange.
This will be the second time in three months that the company is increasing prices of its vehicles.
The ex-showroom price of the company’s model range will increase by up to 5 per cent from April 1, 2023, the company said.
Mercedes-Benz India Managing Director & CEO Santosh Iyer told PTI that the company has been tracking the Euro and the Rupee has depreciated against it in the past few months.
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”In October it (Euro) was around 78-79 (to a Rupee) and now it is at 87. It is really putting pressure and if we don’t take this proactive step now, it will deteriorate our overall business model in India,” he said.
As a result, from April, prices of the company’s A-Class limousine will go up by Rs 2 lakh and GLA SUV by Rs 7 lakh for the top-end S 350d limousine, while the top-end Mercedes Maybach S 580 will see an increase in price by Rs 12 lakh.
This will be the second price hike that the company will undertake this year after it increased prices in January by up to 5 per cent.
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.