New Delhi, India | December 25, 2025
Luxury carmaker Mercedes-Benz India is planning to increase vehicle prices every quarter starting January 2026 as it looks to mitigate the impact of the sharp depreciation of the Indian rupee against the euro.
While the company has not finalized the exact magnitude of the hikes, prices are expected to rise by around 2% each quarter, according to senior management. The staggered increases are aimed at balancing cost pressures without significantly impacting customer demand.
Rupee Depreciation Drives Cost Pressure
Mercedes-Benz India Managing Director and CEO Santosh Iyer said the euro-rupee exchange rate has remained above ₹100 throughout 2025, well above historical averages.
“About 18 months ago, the exchange rate was around ₹89 per euro. Today, it is in the range of ₹104–105, which represents a significant depreciation,” Iyer said.
He added that the company would need to continue raising prices in phases to recover the impact of the currency movement.
Why Price Hikes Will Be Staggered
According to Iyer, the combined impact of rupee depreciation and required price adjustments amounts to more than 10–15%, making a single sharp hike impractical.
“If we pass on the entire increase at once, demand could be affected,” he said, explaining why the company has opted for incremental price increases instead of a one-time jump.
Industry-Wide Impact
The weakening rupee has increased import costs across the automotive sector, particularly affecting luxury carmakers that rely heavily on imported components and fully built units. Mercedes-Benz’s move signals continued pricing pressure in the premium vehicle segment in 2026.
