German premium carmaker Mercedes-Benz said on Tuesday that prices of all its models would be increased from May 1 because of rising raw material prices and an adverse exchange rate scenario.

Though the company did not mention the extent of the price increase, reports have indicated that hike will be in the 1.5-2 per cent range.

The C-Class sedan will become dearer by up to Rs 50,000, while the E-Class could see an up to Rs 1 lakh increase. “The rising input costs and challenging exchange rates as well as inflationary impacts are areas that have a bearing on the cost of the final product. We have absorbed these to a significant level but moving forward we will have to pass on some portion of this impact to the customer,” said Mr Peter Honegg, Managing Director and CEO of Mercedes-Benz India.

Meanwhile, the carmaker said it plans to rejig its portfolio in favour of diesel cars and has chalked out a strategy that includes increasing its dealership network and improving customers' experience to boost its sales.

Mr Honegg said that competitors' sales showed that customer mentality favoured diesel cars.

Thrust on diesel cars

“Our present portfolio is heavy on the petrol side. We will look into expanding and rearranging this to increase diesel cars,” he said, indicating that the company may seek to reverse the 65:35 ratio that currently stands in favour of petrol cars.

Elaborating on the targets he said, “Our target is to expand the network as fast as possible. We will add 7-10 new outlets a year for the next 3-5 years.”

At present the company has 47 touch points for its cars and 11 for commercial vehicles. With Tier-II and -III cities also on the radar, MBI will consider setting up new dealerships in areas where annual sales touch 50 units, he added.

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