If you plan to buy a car in the new year, you may have to pay a higher price. In response, Mercedes-Benz India announced to increase the prices of its vehicles by 2% from January. The company cited rising operating costs and continued weakness of the Indian rupee against the euro as the main reasons for this change in price. According to the company, this limited price increase reflects foreign exchange pressure on the luxury car industry in 2025. Key challenges facing companies: Weak rupee: According to the company’s MD and CEO, Santosh Iyer, currency challenges have persisted longer than expected. The Euro is still trading above ₹100, which remains volatile for a longer period. Rising costs: The weakening rupee makes imported components (be it for local production or fully built CBU vehicles) more expensive. Supply chain pressure: This Pune-based company said that the current foreign exchange situation has created a lot of cost pressure in the supply chain. Second input costs: Rising input costs, commodity prices, logistics expenses and general inflation also put pressure on the company’s profit. Company’s position and customer relief The company also clarified that its localization strategy helped to offset a large part of the cost increase, but this price adjustment became necessary to ensure long-term operational sustainability. To give relief to the customers, Iyer said that due to the continuous reduction in the repo rate by the RBI, Mercedes-Benz Financial Services is able to provide relief to the customers in interest rates. This will significantly reduce the impact of price increases. Industry Trend Mercedes-Benz India is not alone in raising prices due to rising costs. According to sources, BMW India had earlier announced plans to increase the prices of vehicles from January, citing the weak rupee, which shows the increasing cost pressure in the industry. It is possible that local companies can also do the same. Therefore, the purchase of cars can become more expensive from the beginning of the new year. Share this story Tags