Mercedes-Benz delivered its strongest revenue performance ever in India in 2025, fueled by growing demand for its most expensive luxury vehicles, even as fierce competition in the entry-level segment weighed on overall sales volumes, according to the company’s top executive in the country.
The German automaker’s Indian operations sold 19,007 vehicles last year, a slight decline from 19,500 units in 2024, Chief Executive Officer Santosh Iyer said. The decrease narrowed Mercedes-Benz’s lead over rival BMW, which sold around 18,000 cars in India during the same period.
Despite the modest drop in total sales, Mercedes-Benz achieved record revenues, reflecting a strategic pivot toward higher-margin vehicles. Sales of entry-level luxury models fell 23% in 2025, pressured by aggressive price competition. In contrast, demand for top-end vehicles rose 12%, while AMG performance car sales jumped 34%, highlighting strong consumer appetite for premium and ultra-luxury models.
“There is a clear price war in the entry luxury segment,” Iyer said. “We have chosen not to participate and will continue to stay out of it.”
“Our focus is value over volume,” he added.
This strategy has significantly boosted pricing power. The average selling price of aMercedes-Benz vehicle in India increased to $111,000 in 2025, up from $98,500 two years earlier, contributing to what Iyer described as the company’s best-ever revenue performance.
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While Mercedes-Benz does not publish detailed market-specific financial statements, filings with Indian authorities show the company generated nearly $1.5 billion in revenue in the fiscal year ending March 2025, marking a 9% year-on-year increase and the highest level on record.
With sales of vehicles priced above 15 million rupees ($166,115) continuing to grow through 2025, Mercedes-Benz expects to exceed that revenue figure in the current fiscal year ending March 2026, Iyer said.
India’s luxury car market remains relatively small, accounting for just over 1% of total passenger vehicle sales, which reached 4.4 million units in 2025. Still, premium automakers are increasingly targeting affluent buyers in major urban centers, where demand for high-end vehicles continues to rise.
Looking ahead, Mercedes-Benz plans to launch 12 new models in 2026, including electric vehicles, AMG performance cars, and top-end luxury offerings, as it seeks to further strengthen its position in the premium segment.
Iyer said the company is targeting single-digit sales growth this year while managing costs amid foreign exchange volatility and broader economic pressures.
“Margins may face some pressure,” he said, “but we continue to operate a very profitable business.”
