German luxury carmaker Mercedes-Benz has announced a significant shift in its pricing strategy for the Indian market. The company plans to introduce price hikes on a quarterly basis throughout 2026. This move is a direct response to the persistent challenges posed by foreign exchange fluctuations, which have been eroding profitability.
Forex Volatility Drives Strategic Shift
The core reason behind this planned quarterly price adjustment is the ongoing adverse movement in the euro-rupee exchange rate. According to the company, the exchange rate has consistently remained above the Rs 100-mark against the euro throughout 2025. This level is significantly higher than historical averages, creating sustained pressure on the cost of importing completely built units (CBUs) and components.
Traditionally, automakers in India, including luxury players, have opted for annual price revisions, often timed with the new year or at the launch of new model years. Mercedes-Benz India's decision to move to a quarterly price hike cycle in 2026 marks a departure from this norm, highlighting the severity of the current forex environment.
Impact on Customers and the Luxury Car Market
This new pricing strategy will inevitably make owning a Mercedes-Benz vehicle more expensive for Indian consumers. Potential buyers may need to factor in the likelihood of increasing costs every three months, which could influence purchase decisions and financing plans.
The step underscores a broader challenge faced by import-dependent industries in India. When the rupee weakens against major currencies like the euro, the landed cost of imported goods rises. For a luxury brand like Mercedes, which imports a substantial number of models and high-value parts, this forex impact is acute and directly affects the final price tag for the end customer.
A Proactive Measure for Business Stability
By announcing this plan in December 2025, Mercedes-Benz India is setting clear expectations for the market. The company frames the move as a necessary step to offset the adverse forex impact and ensure the long-term sustainability of its business operations in the country. It is a proactive measure aimed at protecting margins rather than a reactive one.
This approach may set a precedent for other luxury car manufacturers facing similar headwinds. The Indian luxury automotive sector, which has been witnessing robust growth, now has to navigate the added complexity of frequent price recalibrations due to external economic factors.
The announcement was made public on 23 December 2025, giving the market and consumers advance notice of the strategic change slated for the following year.
