Mercedes-Benz India confident of sustaining growth on strong demand this year

Mumbai: on Monday expressed confidence in sustaining growth this year, citing strong demand despite macroeconomic headwinds and geopolitical uncertainties.

The premium car maker also said that a price increase was on the cards to deal with the impact of sustained pressure on Indian Rupee, among others, a top company official said.

Earlier, the Pune-based Indian arm of the German premium car maker Mercedes-Benz introduced its first-ever , in the new S-class in the domestic market at a starting price of Rs 2.20 crore.

The bookings for the new S-class are already opened while the deliveries will commence from the December quarter of 2026, the company said.

“We started the year with a prognosis of growth, we still continue that. Last time we said there will be a single-digit growth for the year. We are confident that we will deliver growth (this year as well), and that also includes growth in the first half of this year,” Mercedes-Benz India Managing Director and Chief Executive Officer told PTI in an interaction.

He, however, did not say whether the growth would be in the high single digits or lower.

“We feel there would be growth coming in, in spite of what is happening on the macroeconomic and the geopolitical side. So the demand continues to be strong,” he said.

The company had delivered a 7 per cent growth in total sales at 5,131 units in the first quarter (January-March) of CY 2026 as compared to 4,775 units sold in the same period last year.

For CY 2025, Mercedes-Benz India total sales were down 2.85 per cent year-on-year at 19,007 units compared to 19,565 units in the year earlier. On the contrary, the company posted its best-ever fiscal sales of 19,363 units in FY26 as compared to 18,928 units in FY25.

When asked whether the growth was expected in high single digit or lower than that, Iyer said, “The H1 (January-June 2026) numbers will determine some course for sure, but it is an unstable market not just from a macroeconomic perspective or geopolitical, but also (from) exchange rate, price increases (perspective), so very difficult to put a clear number.”

“But I think as long as the sentiments are positive, more number of customers are buying cars compared to previous year, the average selling prices are going up, premiumization is happening in the market, our TEV (top-end vehicles) share is going up significantly, that shows that the average selling price would have gone up significantly high, so I think these are positives that we need to see,” he added.

The in the company’s top-end vehicles now accounts for 20 per cent and growing strong while the overall penetration would have exceeded close to 10 per cent already, Iyer said, adding that the EV sales grew by double digits compared to last year.

As much as 27-28 per cent of Mercedes-Benz India total volumes come from the TEV segment or cars that are priced above Rs 1.5-crore, he said.

Stating that the company has already undertaken two price increases this year and that a third may be around the corner, he said, “We still feel demand and sentiment is positive and growth should continue.”

The company’s EV sales dropped 10 per cent year-on-year last fiscal, which it attributed to the discontinuation of imports of certain electric CBUs.

“Therefore for couple of months, we did not have any car in the entry and the core segment, but now with the new CLA, we are seeing a significant demand. In fact, the car (the PHEV) is sold out till October- November this year, so clearly that entry is plugged,” he said.

There will be many more electric cars coming to the portfolio, so overall on electric we are growing, he said.

Iyer said that with the S-Class launch, the company is also introducing a new powertrain with the hybrid portfolio being introduced in India, “reinforcing a powertrain agnostic strategy for the domestic market.”

“So, we are going beyond electrics, gasoline and clean diesels, we are now introducing a new option for the customer as well,” he added.

The company is offering only plug-in hybrid as an option to the customer, so that they can switch to a multi-powertrain strategy, he added.

Iyer said that despite the West Asia conflict, supply chain and logistics both have worked extremely well for the company to ensure that the demand is taken care of to a large extent, but added that “we have a higher cost coming in because of the disruptions, but we had enough buffer stocks etc., to cater.”

“What we are right now struggling with is the increased demand for cars like CLA, EV, increased demand for diesel as a powertrain and there we are trying to adjust our supply chain to cater and we still have a waiting (period) for certain cars,” he said, attributing the longer waiting period to factors like diesel supply, among others.

Iyer said that the company wants to continue the launch momentum, and of the 12 product launches announced at the beginning of the year, almost 8 -9 have already been rolled out and the remaining 3- 4 launches this year will have both ICE and EV cars.