Mercedes-Benz, BMW to hike prices from January 1, first since GST cut

Mercedes to hike prices by up to 2%

Mercedes-Benz and BMW, who between them control 87% of the luxury car market, will increase prices of their cars from January 1, 2026, in the range of 2-3%.

The increase, which will be the first since the reduction in the goods and services tax (GST) on September 22, 2025, is intended to offset the depreciation in the Indian rupee against the euro, the two brands said.

While Mercedes-Benz, the country’s largest luxury carmaker, said it has capped the price correction at 2%, BMW, the second largest player, will hike prices by up to 3%, as per sources.

Throughout 2025, the Euro-INR exchange rate has traded persistently above the Rs 100 mark. Mercedes had last hiked prices in September, 2025 by 1-1.5%.

“This currency environment has created substantial cost pressures across the supply chain, affecting both imported components for local assembly, as well as import of CBU (completely built vehicles),” Mercedes-Benz stated in a release.

Mercedes-Benz has had a blockbuster festive season this year. The brand sold 2,500 cars in the nine days of Navratri, with a price at an average of Rs 1 crore per car. The trend continued into October. However, November was soft.

There was almost no growth for the company when it comes to combined sales for October and November. The company clocked 3,396 units in these two months, almost the same as in 2024, according to data shared by the Federation of Automotive Dealers Association (FADA).

BMW sales for October and November saw a rise of 6% to 2,849 units, as per registration data shared by FADA.

The rupee has declined against the Chinese yuan as well besides dollar and euro. This will increase cost for those companies that depend on electric vehicle battery cells and rare earth magnets, as China is the largest supplier of both these items to India’s automotive industry. Tesla imports the Model Y from China in a fully built form to be sold in India.

India almost fully imports all its requirements of EV battery cells and rare earth magnets. The rupee slide could lead EV makers to pass on the price hikes to customers. BYD, China’s largest EV maker, will hike prices of the Sealion 7 EV in India in January, 2026.