DH Interview | 'Optimistic across our portfolio, enthusiastic about our top-end': Mercedes-Benz India MD & CEO Santosh Iyer

2025 was a landmark year for Mercedes-Benz India, with record revenue and sale of 19,007 units. The German luxury automaker saw double-digit growth in its top-end segment, and a 12% rise in EV sales, with electric vehicles now accounting for 20% of top-end deliveries.

Amidst discount battles in entry-level luxury cars, the brand stayed the course, focusing on sustainable growth, localisation, and customer-driven powertrain choices, while preparing for a slew of launches in 2026. Mercedes-Benz India MD & CEO Santosh Iyer shares the strategy and vision of the company, apart from certain trends of the luxury segment, with Hrithik Kiran Bagade of DH in this candid interview.

Edited Excerpts:

How was the year 2025 for Mercedes-Benz in India?

Last year, we sold 19,007 units, which was the best-ever year in terms of revenue for us. If you look at segments, we had a growth of 11% in top-end vehicles. These are cars that cost Rs 1.5 crore and above. That showed significant growth. AMGs grew by 34%. When you look at electric vehicles, we grew by 12% compared to the previous year. The penetration of EVs in the top-end segment is 20%. So, if you look at all these data points, 2025 has been a great year for us.

After five years of dominance, was there a dip in your annual sales last year?

In luxury, there are three segments — entry, core, and top-end. Last year, there was an intense discount battle in the entry segment, and we decided not to participate in the price war that was underway. We want to grow sustainably. As I said, it was the best-ever year in terms of revenue, so absolute numbers don’t matter, and we will continue advancing on the same strategy. This isn’t the first time we’ve seen competitors discounting and selling cars, but we won’t go on that route. Yet we are still leading by a fair margin as far as last year is concerned. We hold over 40% market share. In terms of sustainable growth, we are aiming for long-term, pragmatic growth. If you go back in history, some brands have grown inorganically via price.

How bullish are you on your EV segment? Are you concentrating on different powertrains at the same time?

First of all, in the EV space, we have grown by 12%. I spoke about 20% penetration in the top-end segment. We are localising EVs. We were the first in India to localise our EVs — EQS SUV and sedan — at our Chakan facility (Pune), way back in 2020-21. So we are committed. EV penetration is also based on price and government subsidies like 5% GST, as well as road tax incentives. If these go away, penetration will slow. So we would rather allow the customer to decide the pace of transformation. Accordingly, we would have all powertrains — gasoline engines, clean diesels, and EVs — and let the customer decide. We won’t be driving the transition. Having said that, a lot of EVs will make their way into India in our portfolio, and we will continue to offer all products to customers.

The S-Class facelift was revealed recently. How many more models can we expect this year?

Twelve cars will be launched this year. We have already localised the GLS Maybach, while the new CLA will also make its way to India this quarter. The S-Class had a global preview, but it takes time to bring it to market. The S-Class is one car we are all looking at. For decades, effort was made to make the S-Class even better, because when you see earlier models, you think you have reached the pinnacle of automotive excellence — and then our engineers make it even better. I think that’s where the anticipation comes from. We are optimistic across our portfolio and enthusiastic about our top-end. Our E-Class continues to be the highest-selling luxury sedan in India.

You mentioned localisation. How are you currently managing, and what is your goal?

We have more than 11 cars locally manufactured at Chakan. We just localised the GLS Maybach as well. Investments in our manufacturing ecosystem in India exceed Rs 3,000 crore, the highest in the luxury car segment. That shows our commitment to the market. Around 92% of the cars we sell in India are locally produced. Besides, we have a sourcing office, and we are also sourcing from India for the world. We have been doing this for many years now.

What is your strategy against competition?

We have always led the market without focusing on the competition. Otherwise, we wouldn’t have done the ‘Retail of the Future’ D2C model, and would still be in the push model of sales. We are determined by what the customer needs, and our brand is our most-valuable asset, which we won’t dilute. We provide products to customers as they require. We are happy to see many initiatives copied by competitors — it helps grow the market. We welcome competition, in India and abroad. We are a ‘140-year-old startup’ and will continue to be around for the next 140 years and beyond.

The luxury car segment in India is just around 1% of the total market. What challenges does it face?

Firstly, consider per-capita income. Many wealthy customers drive luxury cars, and the segment is growing. But there is also restraint when it comes to luxury purchases. The new generation is changing this — they want to consume luxury now. There is also a tendency to save more, which limits growth. One of the biggest issues is the price of luxury cars, which rises with rupee devaluation, affecting affordability. Some competitors bring cheaper cars and operate at lower price-points. Mercedes-Benz focuses on value over volume. Hence, growth hasn’t been as rapid as it could be.

Do you think favourable policies can help change the trend?

The government has multiple priorities, and growing the luxury car market may not be one of them. But in general, infrastructure, especially good roads, has encouraged growth. If the rupee stabilises and prices remain steady, we may see dramatic growth in the luxury car segment.

What are your expectations from the India-EU FTA?

We have always advocated free trade. For India, an FTA would provide access to a larger economy and consumer base. For Mercedes-Benz India, irrespective of the FTA, we have already localised over 90% of our portfolio.