The country’s leading luxury car maker, Mercedes-Benz India, on Thursday said it was considering another price increase anytime because of continuing high input costs and global supply chain issues.

The company increased the prices of its select models by two per cent on ex-showroom prices, effective January 1, due to the sharp increase in commodity and logistics costs combined with inflationary pressures.

“Supply chain issues and those challenges continue, and I think they will not go away as well...we have to try to see how to manage within the available resources and try to maximise outcome...these are challenges that we see. We did one price increase in January and held back right now, and we have to be cautious because the prices of luxury car and cost of Mercedes-Benz gone up significantly in the last couple of years,” Santosh Iyer, Managing Director and Chief Executive Officer, Mercedes-Benz India told businessline.

He said that the top-end vehicle (TEV) segment in the Mercedes-Benz portfolio used to be categorised at Rs.1 crore plus a couple of years ago, but now, to be more realistic, it is categorised at Rs.1.5 crore plus.

Having said that in terms of growth expectations, the company was optimistic to do better in the coming months and grow by double digit this year too.

Sales performance

On Thursday, the company reported record sales of 18,123 units in the fiscal year 2024 (FY24), a 10 per cent YoY growth compared with 16,497 units in the same period in FY23. This was the highest-ever sales in the company’s 30 years in India.

In the calendar year, too, it reported the highest-ever retail sales of 5,412 units, a YoY growth of 15 per as compared with 4,697 units in the January-March quarter last year.

“From an outlook perspective, we had a strong 15 per cent growth, we are committed for a double digit growth for the year. So, I think we have to cautious, but these are also headwinds that we see. But, in general, looking at the first quarter and in fact I can say for April, Gudhi Padwa in South to Navaratris in the North, we have seen continued demands for Mercedes cars,” he said.

Iyer also mentioned that Mercedes-Benz India currently has an order book of around 2,000, with waiting periods ranging from two months to 12 months. A product like the E-Class has received a big response, and it ran out of the car a bit earlier than planned, which means it won’t have any cars to sell for a couple of months, he added.

Recently, Audi India also mentioned supply chain issues while sharing the sales numbers. The company sold 7,027 units in FY23-24, posting an overall growth of 33 per cent, but in Q1 2024, it sold 1,046 units due to ‘notable challenges with sales compared to the corresponding period last year, primarily due to supply chain disruptions’.

“Despite ongoing growth in the luxury market, which is tapering off on the back of record-breaking sales in 2023, we are confident about the industry’s potential to exceed 50,000 cars in 2024,” Balbir Singh Dhillon, Head of Audi India had said.

BMW Group India also posted a strong sales performance in the January–March quarter, delivering 3,680 cars (BMW and Mini) and 1,810 motorcycles (BMW Motorrad). It sold 3,510 BMW cars and 170 Minis.