From next year, Mercedes-Benz will get costlier every quarter

India’s largest luxury carmaker, Mercedes-Benz, will hike prices of its vehicles every quarter next year to offset the impact of the rupee’s depreciation against the euro.

With the exchange value rising from Rs 89 about 18 months ago to over Rs 104 now, the company feels it can only offset the depreciation by hiking prices every quarter. The playbook could be followed by other carmakers, especially German luxury carmakers.

Mercedes is currently the largest luxury carmaker in the country and sells popular models such as the E-Class sedan and the C-Class, as well as SUVs such as the Mercedes-Benz GLC, GLA, and GLS. Its rivals in the domestic market include BMW, Audi, and Volvo, among others.

Across the country, most automakers are gearing up to hike prices, as is an annual practice in the new year. Already, JSW-MG Motors has announced plans to hike prices by 2 percent, while BMW Motorrad India has announced a 6 percent hike. Electric vehicle maker Ather has also announced a Rs 3,000 hike for its vehicles.

“Currency headwinds have persisted longer than we anticipated this year, with Euro consistently trading over Rs 100 mark,” Santosh Iyer, Managing Director & CEO, Mercedes-Benz India said in a statement. “This prolonged volatility affects every aspect of our operations, from imported components for local production to completely built units. In addition, rising input costs, increasing logistical expenses, in combination with inflationary costs have significantly risen our overall operational costs." Import-dependent businesses, particularly automakers, are usually hit hard by currency volatility.

Last week, the rupee slipped to a fresh all-time low, crossing the 91 mark, making it one of the weakest major currencies globally this year and the lowest in Asia so far in 2025. The RBI hasn’t been aggressive in its intervention in arresting the fall, since a weaker rupee helps exports in a global trade-war environment.

For automakers, especially domestic automakers, who are expected to announce similar price hikes in the coming days, a revival in auto sales demand, driven by the government’s decision to cut GST rates, will offer some hope. “Retail sales grew 22% YoY but dipped 29% from October's festive peak, while wholesale volumes rose 19% YoY to 4.1 lakh units, OEMs maintained production to meet demand,” ratings agency ICRA said in a statement. Statement. “Overall 8M FY2026 wholesale growth stood at a modest 3.6% YoY versus 6.1% for retail.”