We have been in India for 30 years, very much swadeshi: Mercedes-Benz India MD and CEO Santosh Iyer

Mercedes-Benz India MD and CEO Santosh Iyer with the new GLS AMG Line.

Mercedes-Benz India MD and CEO Santosh Iyer today said that the luxury carmaker is very much a swadeshi brand, having completed 30 years in the country and garnering volumes of over 2,00,000 units during this time.

While the luxury car segment leader marked three decades of operations in India in 2024, the company's growing hold in the market can be gauged from the fact that it sold 1,00,000 units in the last six years only.

Mercedes-Benz has a CKD production facility in Chakan (Pune), which is spread over 100 acres. With an investment of over Rs 3,000 crore till now, the Chakan unit has the largest installed production capacity for any luxury carmaker in India.

Besides, Mercedes-Benz Research and Development India (MBRDI), headquartered in Bengaluru, is the largest R&D centre for Mercedes-Benz Group AG outside of Germany.

"We have been in India for 30 years. We are very much swadeshi. I have 10,000 Indians working in Bengaluru, doing R&D for the world. There is India in every Mercedes sold anywhere in the world. We have a non-banking financial company, which is more than 1 billion in portfolio. A lot is happening, and a lot is invested in India. Our growth is fully linked to India's growth and progress," Iyer said at the Network18 Reforms Reloaded 2025 event.

Mercedes-Benz retailed a record 19,565 cars in India in 2024, logging a growth of 12.4% year-on-year (y-o-y). While 2024 was the carmaker's best year ever in India in terms of sales, it was also the 10th consecutive year that it secured the top position in the luxury car market.

The company's locally-produced sedan portfolio includes the A-Class, C-Class, E-Class LWB, S-Class, and Maybach S 580 limousine. Its Made-in-India SUV range includes the GLA, GLC, GLE, and GLS. Among its locally-produced electric vehicles (EVs) are the EQS 580 sedan, EQS 580 SUV and EQS 450 SUV. The completely built-up (CBU) line-up has the G 400d SUV (G-Class), GLS Maybach SUV and the AMG range.

When asked about the impact of the proposed free trade agreement (FTA) between India and the European Union, Iyer said: "We as multinationals have always advocated free trade fundamentally because we feel that economic growth is significant when the borders open, and it is not only about tariffs, it is also about harmonising the regulations between countries. The Indian automotive industry has also come of age. So the access to bigger, developed markets, which have money in their pockets to sell and export, grows."

"As far as we are concerned, more than 90% of the cars we sell in India are locally produced. They hardly have a 15% tariff when it comes to parts and components. That will not change. The rest are CBUs, which are all those exotic cars like G Wagons and Maybachs. There is a lot of anticipation and expectation that the prices may come down. But in the real sense, we would say no. We need to see that by the time it materialises, already there is a 10% gap between the pricing and the euro," he added.

However, according to Iyer, the FTA would result in more cars being allocated to India, giving customers better access to them.

"In the larger scheme of things, the two-way trade will go significantly higher. That opens up new opportunities for us as well to look at India differently. In 30 years, we have sold more than 2,00,000 Mercedes-Benz cars in India. 1,00,000 Mercedes-Benz cars have been sold in the last six years. So that is the kind of demand and uptick we see now," Iyer observed.

In the Goods and Services Tax (GST) 2.0 regime, luxury cars are in the 40% slab. Also, there is no compensation cess now. Earlier, they attracted a GST of 28% along with a compensation cess of up to 22%, taking the total tax incidence to about 50%.

According to Iyer, while the average price cut due to GST rationalisation is close to 5-8%, for the luxury cars, it is around 6%, which has been passed on to the customers. "That is substantial from Rs 1.5 lakh to Rs 10-20 lakh, depending on the car," he said.

Among the Mercedes-Benz SUVs, the GLA 220d 4MATIC AMG Line has seen a price cut of Rs 3.8 lakh, the GLC 300 4MATIC of Rs 5.3 lakh, the GLE 450 4MATIC of Rs 8 lakh and the GLS 450d AMG Line of Rs 10 lakh. So far as the sedans are concerned, the A200d has become cheaper by Rs 2.6 lakh, the C300 AMG Line by Rs 3.7 lakh, the E-Class LWB 450 4MATIC by Rs 6 lakh and the S 450 4MATIC by Rs 11 lakh.

"Our expectation is that in the next eight days, we will record the highest per-day car sales in history in India," Iyer said, adding that there is a lot of optimism that the festive period should deliver a double-digit growth.

On the compensation cess issue, Iyer noted that the dealers are really grappling with it. "There are still deliberations on with the government regarding it. To offset the cess balance, the dealers are throwing cash benefits. Some original equipment manufacturers (OEMs) are also encouraging dealers to give this benefit. But it is going below the balance sheets and will hit the profits," he said.