Santosh Iyer, MD and CEO, Mercedes-Benz India, discusses the company’s network expansion plans, product strategy and localization efforts and why it is staying away from price-driven volume growth even as the luxury car market remains stagnant. Edited excerpts:
Mercedes-Benz India has just opened a new showroom in Bengaluru. How does this fit into your broader network expansion plans?
Today, we have the largest luxury touchpoints in India – around 140 across the country. This year we will add 20 more touchpoints and open three new cities. Our dealer partners have committed investments of approximately ₹450 Crore over the next two years to support this expansion. In Karnataka, this is our 13th touchpoint and Bengaluru gets its third dealer partner. The investment here is over ₹20 crore, with a 10,000 square meter retail area and a 20,000 square meter service outlet.
They have also introduced a Maybach lounge in this facility. How important is the top-end segment for Mercedes-Benz India?
The top-end segment is extremely important for us. India has become one of the top five Maybach markets worldwide, which is a major milestone. We have also localized the GLS Maybach in India. Bengaluru is now the only city in the country with a Maybach Lounge and our “Icons of Luxury” concept for retailing Maybach accessories. This reflects our overall strategy to strengthen the premium luxury space in India
How has Mercedes-Benz developed across segments in 2025?
In 2025, we grew 11 per cent (in terms of revenue growth) in the premium segment (luxury segment with high margins, mainly more than ₹1.5 Crore in India), which also made it our best year ever in terms of revenue. However, the entry-level luxury segment saw a decline of around 23 percent. That was a conscious decision. We have chosen not to engage in aggressive discounting in this segment. Our philosophy has always been to value value over volume.
Does this mean Mercedes-Benz is struggling to lose market share in the entry-level luxury segment?
We have been very clear about this for many years. We followed a similar challenge 12-13 years ago and later returned stronger. If we were looking for volume, we would not have invested in concepts like “Retail of the Future,” our direct-to-consumer model that focuses on customer experience rather than expanding inventory. We believe that sustainable leadership comes from offering the right products and experiences, not by buying market share.
What are your product plans for FY26?
We will launch 12 new cars this year. These are high quality, well specified products. We have already located the GLS Maybach. The next big launch is the CLA Electric which will be coming to India very soon. We will continue a strong product offensive in several segments, but these will not be entry-level offerings. Our goal is to offer every customer a Mercedes, not just the logo.
How does localization shape your strategy, especially given currency volatility?
Currency fluctuations and geopolitical uncertainties are external factors that we cannot control. A devaluation or appreciation of the euro by 15 percent cannot be completely passed on to customers. That’s why we’re focusing on internal cost measures and localization to absorb some of these shocks. For example, in the new E-Class all glasses and glazing are now localized in India. The localization also demonstrates our long-term commitment to the Indian market.
How do you see demand trends for body styles and powertrain types?
SUVs account for about 60 percent of our sales, but the E-Class remains the best-selling luxury sedan in India. Electric vehicles accounted for about 8 to 9 percent of our total sales last year, and in the top segment, electric vehicle penetration was close to 20 percent. We will continue to offer petrol, clean diesel and electric options and let customers decide the pace of the transition.
There have been comments about slower volume growth over the last year. How do you react?
Luxury cannot only be measured by the number of units. Looking at revenue, financial services growth and our overall portfolio, which has crossed the ₹14,000 crore mark, Mercedes-Benz India is showing strong growth. We prefer a holistic view of performance rather than obsessing over absolute quantities in a stagnant luxury market