(Image source from: Twitter.com/MercedesBenzInd)
Amid increasing inflationary pressures, rising material costs and rising operating costs, luxury car makers Mercedes-Benz India and BMW India have announced a price hike of up to 3% for all models from January 1, 2025. Mercedes-Benz India has adjusted ex-showroom prices from Rs 200,000 to Rs 900,000 depending on the model. This adjustment affects vehicles such as the GLC SUV and the Mercedes-Maybach S 680 luxury sedan. The company cited higher material costs, fluctuations in raw material prices and higher logistics costs as the main factors for the price adjustment, but the company has absorbed much of this cost pressure in the last three quarters. “To ensure the sustainability of our business, we have decided to revise the nominal prices,” said Santosh Iyer, managing director and CEO, Mercedes-Benz India. “Current issues affect our lines”.
BMW India has also announced a similar 3 per cent price hike across a wide range of models, including domestically produced vehicles such as the BMW 2, 3 and 7 Series, as well as popular SUVs such as the BMW X1, X3 and X5. did X7. Imported models such as the BMW i4, iX and M-Series will also be affected by this price increase. According to this company, the price adjustment is in response to the increase in input costs and inflation. BMW called this a response to changing market conditions, inflation and rising input costs. Analysts expect price increases of 3-5% to become the norm across the industry due to rising raw material and logistics costs as well as currency fluctuations. Anurag Singh, managing director of Primus, said: "Input costs for automobile companies, especially luxury carmakers, which are heavily dependent on imports, are rising due to higher imports and the US dollar." December is traditionally a discount month, but prices usually rise in January".
Singh believes that a price increase of 3 to 5 percent is necessary for the industry to be profitable in the current economic climate. He also pointed out that December is usually a month of discounts in the auto market, making it difficult for manufacturers to push through price increases before the new year. Despite the price increase, Mercedes-Benz and BMW are trying to mitigate the impact for customers through flexible financing options. These include lower interest rates, attractive monthly payments, long-term cancellation options, etc. In addition, the companies are offering price protection for customers who book vehicles before the price changes take effect in January 2025. This price adjustment is expected to become a trend across India and the Indian luxury car market as inflationary pressures continue to impact the automobile sector. This could set off a trend for other automakers to follow suit.
