Mercedes-Benz India Hits Record Profits with Ultra-Luxury Focus Despite Volume Drop

Mercedes-Benz India achieved its highest-ever revenue and profitability in 2025, despite a 2.8% decline in vehicle volumes to 19,007 units from 19,565 in 2024. This standout performance occurred as India's luxury car sector grew only 1.6% to approximately 52,000 units, highlighting the company's successful shift toward high-margin, top-end vehicles. Managing Director and CEO Santosh Iyer emphasized that this marked the strongest year in the company's 25-year history in India, even with challenging global headwinds like foreign exchange volatility expected to keep 2026 volumes largely flat.

The euro's 19% depreciation against the Indian rupee pressured margins, yet Mercedes-Benz maintained sustainability through minimal discounts—the lowest in the market—which preserved profitability and customer residual values. The company implemented three price hikes totaling 6% in the first half of 2025, offset by a 6% GST rationalization reduction in September, resulting in a net neutral impact. An additional 2% hike followed in January 2026, though Iyer noted that about 10% of the forex hit remains unpassed to customers. "Our business model remains sustainable, and we stay among the most profitable compared to peers," Iyer stated in an interview with Business Standard.

Top-End Models, AMG, and BEVs Fuel the Mix Shift

Sales of top-end vehicles (Rs 1.3 crore and above) surged 11% year-on-year, comprising 25% of total volumes—a key driver of revenue growth. The AMG performance portfolio grew an impressive 34%, while battery electric vehicles (BEVs) rose 12%. Notably, 20% of top-end sales were BEVs, with 70% of all BEVs falling in the Rs 1.25 crore to Rs 3.1 crore range, signaling strong demand for premium electrified luxury.

Also Read: Kia Sets New Sales Record at 3.13 Million Units in 2025

Core luxury models (Rs 65 lakh to Rs 1.2 crore) dominated at 62% of volumes, while entry-level luxury (Rs 45-60 lakh) dropped 20% to just 13% share. Iyer attributed this to a deliberate avoidance of price wars: "First-time luxury buyers are highly price-sensitive amid frequent changes, but repeat customers remain loyal." At Mercedes, 60% of buyers are repeats, with 40% first-timers—a stable mix over recent years.

Rivals Chase Volumes as Mercedes Prioritizes Value

Competitors like BMW Group India contrast this strategy, closing 2025 with a record 18,001 units—a 14% increase driven by first-time buyers, whose share rose to 49% from 43% in 2024. BMW's President and CEO Hardeep S Brar credited this for outperforming the market, as rivals expand the pie through aggressive targeting of newcomers.

Mercedes, however, doubles down on value over volume, with Iyer affirming: "Profitability faces forex stress, but our low discounts ensure long-term strength." Full profitability details will clarify post-quarter, but 2025 already stands as the revenue pinnacle.

Milestone: India First Outside US for Maybach GLS Assembly

In a major boost, Mercedes-Benz India began local assembly of the ultra-luxury Mercedes-Maybach GLS at its Pune plant, making India the first market outside the US to produce it. This elevates India to the global top five for Mercedes-Maybach sales. Previously imported as a fully built unit at 110% duties and priced near Rs 3.2 crore (debuting June 2021), local production slashes the price to Rs 2.75 crore via duty advantages and faster delivery. Customers gain improved accessibility without compromising the model's opulent features, like its handcrafted interior and V8 powertrain tailored for elite tastes.

This strategic pivot not only counters volume pressures but positions Mercedes-Benz India for sustained leadership in ultra-luxury amid evolving market dynamics.

Also Read: Punch Turbo or Nexon Mid-Spec Which is The Better Buy