In a move that will impact affluent Indian consumers, two of the world's leading luxury car manufacturers, Mercedes-Benz and BMW, have confirmed plans to increase the prices of their vehicles. The price revision, set to take effect from the first month of the next calendar year, will see an upward adjustment of at least 2% across their model portfolios.
Forex Pressures Drive the Decision
The primary catalyst behind this decision is the mounting pressure from foreign exchange (forex) fluctuations. Luxury carmakers import a significant number of components, and some models are brought into India as completely built units (CBUs). The volatility in currency exchange rates directly impacts their cost structures, making these periodic corrections necessary to maintain business viability. The new prices will be applicable from January 2026, as confirmed by the companies.
What This Means for the Indian Luxury Car Market
This announcement, made public on 25 December 2025, signals a continued trend of premiumisation where brands are prioritising margin protection. For potential buyers, this means that purchasing a new Mercedes-Benz or BMW in the new year will come with a higher price tag. The minimum 2% increase will apply to a wide range of models, from entry-level luxury sedans to high-end performance SUVs.
Industry analysts suggest that such price hikes, while modest in percentage, can translate to a significant absolute amount given the high base value of these vehicles. This could influence the purchase decisions of some customers who might consider advancing their buying plans to December 2025 to avoid the impending hike.
Broader Implications and Consumer Outlook
The simultaneous move by both German giants highlights the shared challenges faced by import-dependent automakers in the Indian market. While domestic manufacturing has increased for some models, the reliance on global supply chains for advanced technology and specific parts remains high. This price adjustment is not merely a brand-specific strategy but an industry-wide response to economic headwinds.
For the Indian luxury car segment, which has shown remarkable resilience and growth, this price increase is a test of sustained demand elasticity. Enthusiasts and loyal customers may absorb the hike, but it could prompt others to explore the pre-owned luxury car market or evaluate competitive offerings from other brands who may follow suit with their own pricing strategies.
