Mercedes-Benz India Sales Dip 3% in 2025, First Fall in 5 Years

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AuthorAnanya Iyer|Published at:
Mercedes-Benz India Sales Dip 3% in 2025, First Fall in 5 Years
Overview

Mercedes-Benz India experienced its first sales decline in five years during 2025, with volumes dropping 3% to 19,007 units. Despite the dip, driven by price hikes and competition, the company achieved record revenue thanks to strong sales in its high-end vehicle segment. Competitors BMW and JLR reported growth.

Mercedes-Benz India's sales fell 3% year-on-year to 19,007 units in 2025, marking the first volume decline for the luxury car leader in five years. The drop occurred despite the company posting its best-ever revenue performance in India, driven by a richer product mix.

Competitive Pressures and Pricing Strategies

Company executives cited competitive intensity, currency-driven price hikes, stock market volatility, and geopolitical uncertainty as key factors impacting sales. Managing Director and CEO Santosh Iyer noted that exchange rate volatility necessitated calibrated price increases throughout the year. A "price war" in the entry-level segment, with cars priced around ₹50 lakh, also prompted Mercedes-Benz to consciously avoid aggressive discounting to protect residual values and brand equity, leading to a 20% fall in its market share at the entry level and impacting overall volumes.

Competitor Performance and Market Share

While Mercedes-Benz retained its leadership position with approximately 36% market share in the luxury segment, rival BMW saw significant growth. BMW India sold 18,001 units in 2025, a 14% year-on-year increase, attributed to new model launches and strong demand for its electric vehicles (EVs). An industry analyst suggested BMW's uptick was largely driven by aggressive discounting. Jaguar Land Rover (JLR) India also reported strong momentum, with registrations rising 22% to 5,755 units during the year.

Key Growth Drivers: Top-End Models and EVs

Despite the overall volume decline, Mercedes-Benz India's performance at the top end of its portfolio was exceptional. Top-end vehicles (TEVs), including the S-Class, Mercedes-Maybach, and AMG models, grew 11% year-on-year. The high-performance AMG portfolio surged by 34%, and battery electric vehicle (BEV) sales rose by 12%. India also entered the top five global markets for Mercedes-Maybach for the first time in 2025, prompting the company to begin local production of the Mercedes-Maybach GLS SUV.

Market Outlook and Affordability Challenges

The overall luxury car market, defined as vehicles priced above ₹50 lakh, remained range-bound, with estimated sales of around 52,000 units in 2025. This represented a modest 1.6% increase over 2024, the slowest pace of growth since the pandemic. Iyer anticipates single-digit growth for the luxury car market in 2026, citing ongoing currency volatility and muted sentiment among first-time buyers as significant headwinds. Affordability remains a key concern, particularly for new entrants to the luxury segment, though the company is addressing this through innovative financing solutions.

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