Leading luxury car maker in the country, Mercedes-Benz India, on Thursday said it was considering another price increase anytime because of continuing high input costs and supply chain issues at the global level.

The company had increased the prices by 2 per cent on select models 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 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 have 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 ₹1-crore plus couple of years ago, but now it is categorised at ₹1.5-crore plus.

Positive on growth

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

The company on Thursday reported a record sales of 18,123 units in FY24, a year-on-year (y-o-y) growth of 10 per cent compared with 16,497 units in the same period in FY23. This was the highest-ever sales in its 30 years in India.

In the of calendar year too, it reported highest-ever retail sales of 5,412 units (4,697 units), a y-o-y growth of 15 per cent.

“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 be 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.

Supply chain issues

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

Recently, Audi India had also mentioned about the supply chain issues while sharing the sales numbers. The company had retailed 7,027 units in FY23-24 posting an overall growth of 33 per cent, but, in Q1 2024, it retailed 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 had also posted strong sales performance in January–March quarter delivering 3,680 cars (BMW and Mini) and 1,810 motorcycles (BMW Motorrad). It sold 3,510 units of BMW cars and 170 units of the Mini.

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