Mercedes-Benz India CEO Forecasts Single-Digit Growth for Luxury Car Market Amid Economic Challenges
In an exclusive interview with TOI, Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, provided a detailed outlook on the luxury automotive sector. He indicated that the market is poised for near single-digit growth, primarily driven by the weakening Indian rupee, which is escalating costs for consumers. While the ongoing conflict in West Asia has influenced consumer sentiment, its direct impact on sales remains limited.
Rupee Depreciation and Price Hikes Impact Consumer Costs
The depreciating rupee is emerging as a significant headwind for luxury car buyers in India. Iyer explained that this currency fluctuation is pushing up expenses, compelling manufacturers to adjust pricing strategies. Mercedes-Benz India has already implemented two price increases in 2026 and is contemplating another adjustment in June to mitigate rising costs. This trend underscores the broader economic pressures affecting high-end automotive purchases, as consumers face higher outlays for premium vehicles.
Limited Impact from West Asia Conflict on Sales
Addressing concerns over the West Asia conflict, Iyer noted that its effect has largely been confined to consumer sentiment, potentially leading to some purchase postponements. However, he emphasized that the company has not witnessed any cancellations, and order intake remains robust. "There will be some impact on the sentiment. There may be some postponement, but we have not seen any cancellations and the order intake continues to be very strong," he stated, highlighting the resilience of demand in the luxury segment despite geopolitical uncertainties.
Mercedes-Benz Maintains Leadership in Luxury Car Sales
Iyer contested recent Vahan registration data suggesting BMW had overtaken Mercedes-Benz as the largest luxury carmaker in the March quarter. He clarified that based on retail sales, Mercedes-Benz sold 5,131 units, compared to BMW's approximately 4,567 units, maintaining its top position. He attributed discrepancies in registration data to factors such as Telangana's exclusion and delays in registrations by customers awaiting special number plates. "In the March quarter, we were 600 cars ahead of BMW… Vahan data has an impact of Telangana not being included and an impact of registration as many of our customers also don’t register the cars because they wait some months to get special number plates," Iyer explained, underscoring the importance of retail metrics over registration figures in assessing market leadership.
Overall, the luxury car market in India is navigating a complex landscape marked by economic challenges and competitive dynamics, with Mercedes-Benz striving to uphold its market dominance through strategic adaptations.
