Mercedes-Benz India unfazed by China rare-earth magnets supply curbs

Company is 'comfortably placed' this year in sourcing critical supply, says automaker

China restricting imports of rare-earth magnets (REM) will not affect Mercedes-Benz India’s production or launch plans this year, said a senior executive of the automaker on Friday.

 

The company is “comfortably placed” this year in sourcing REM, Santosh Iyer, managing director of Mercedes-Benz India, told ‘Business Standard’ at the sidelines of the launch of the company’s performance cars AMG – GT 63 and GT 63 Pro in Mumbai.

 

The company does not plan production cuts or delay timelines for launches as a result of the REM crisis, he said. Its German parent is handling sourcing.

 

Deliveries of GT 63 (priced Rs 3 crore) will start in the fourth quarter of calendar year 2025 followed by those for GT 63 Pro (priced Rs 3.65 crore) in the first quarter of 2026. 

 

‘The South China Post’, while quoting sources in the European Union (EU), reported that China has started issuing export licences for rare earth elements and magnets to bloc companies. EU governments and companies have held talks with Chinese authorities in the past few weeks on the issue and are trying to ease the export restrictions.

 

China indicated earlier in June it was willing to establish a so-called green channel that will be eligible for export licence applications to expedite approval processes to the EU firms.

 

Reuters reported in the first week of June that Mercedes-Benz production officer Joerg Burzer indicated that he was talking to top REM suppliers about building “buffers” as protection against potential disruptions. Mercedes is not affected by the shortage.

 

Last year was Mercedes-Benz’s best in India in its 30-year history by selling 19,565 units and growing 12.4 percent. In fact, in 2024 luxury car sales in India touched 51,000 units for the first time.

 

India’s demand for luxury electric cars has increased sharply this year, much in line with the EV growth in the mass-market segment.

 

Iyer highlighted the strong performance of luxury EVs this year, with industry volumes rising 66 per cent to cross 2,000 units in the first five months of 2025. Mercedes-Benz India’s EV sales grew 73 per cent, accounting for 11 per cent of the luxury segment.