Mercedes Benz Is Gearing Up For A Costlier 2026 — What's The Reason?

Luxury carmaker Mercedes-Benz India has announced an up to 2% price increase on its vehicle models from January 1, 2026.

The company stated that the price correction, capped at 2 per cent, reflects ongoing foreign currency headwinds that have been defining the luxury auto landscape through the year.

The automaker said the revision is driven primarily by the steep Euro–INR exchange rate, which has stayed above the Rs 100 mark through 2025 — a level significantly higher than historical trends. According to the company, it has been absorbing most of the impact of these currency fluctuations and passing on only a small portion of the additional costs to customers.

With forex volatility expected to continue, Mercedes-Benz India also indicated that it may consider further quarterly price adjustments to align more closely with prevailing currency levels.

This comes just a day after German luxury carmaker BMW announced that it was planning a hike in vehicle prices from next month to offset the impact of the weakened rupee against the euro, according to the company's President and CEO Hardeep Singh Brar.

The company had earlier announced to increase prices by up to 3%, also citing the negative impact of continued forex volatility and global supply chain dynamics.

The Indian rupee hit fresh record low, dipping to below 90.50 against the US Dollar on Friday, as the depreciation trend continues.

Carmakers, who had earlier announced that they would not be hiking pricing and passing on the full benefit of the GST rate revision, have also caved to the weakening of the rupee.

Mercedes-Benz India had announced in September that it would pass on the entire benefit of the GST rate reduction directly to the end customers. After the GST Council agreed to implement the two tax slab proposal, the now-revised GST on all Mercedes-Benz cars stood at 40%, effective Sept 22, 2025. EVs, however, continue to attract a 5% GST.