Mercedes to opt for fresh 1-2% price hike

MUMBAI: Mercedes-Benz is set to take a fresh 1-2% price hike in India to cope with exchange rate volatility and broader war-related cost pressures even as it is pushing a new variant of its top-end S-class model into the market to widen choice for consumers amid slow EV adoption. Even though the US and Iran are moving closer to a peace deal due to be signed later this week after months of negotiations, the German luxury car maker’s India MD & CEO Santosh Iyer remains cautious. “If you feel that this crisis is over, the next one is around the corner. The days have gone when you can have a stable environment macro-economically or geopolitically. The exchange rate is a big lever, we have seen deterioration of the rupee. We have done two price increases and the third one will be around the corner. That again puts pressure on demand and sentiment,” Iyer said in an interview. Mercedes-Benz has taken a total of up to 4% price hikes through two rounds since January and has moderated its growth expectation for the year, said Iyer. The company posted a 7% year-on-year increase in total sales at 5,131 units in the March quarter, helped by robust demand for its top-end luxury cars. The firm’s sales are skewed towards the top-end segment but despite a slowdown in the broader entry level space, the electric sedan CLA has been doing well, said Iyer. On Monday, the company launched its new plug-in hybrid version (PHEV) of its S-Class model in India, also its first such variant for the country. Priced between Rs 2.2-2.4 crore (ex-showroom), deliveries for the car will start in Q4 (Dec quarter). PHEV essentially combines an internal combustion engine with an electric motor and a large battery. Iyer expects the launch to push wider adoption of its EVs as it will help customers get introduced to the EV experience as well. “About 20% of our top end vehicles sales is EVs, but still a large part of customers are looking at commercial engine options. This is where we felt that a PHEV bridges the best of all worlds,” said Iyer, adding that weak residual value alongwith range and charging anxiety have discouraged many buyers to opt for EVs. “Overall, it should be a year of growth and not stagnation. Order intake is still positive,” Iyer said.