Demand continues to be stronger than supply: Mercedes-Benz India MD

Mercedes-Benz India could have sold another 1,000 vehicles with adequate CLA EV supplies; the carmaker has over 1,000 orders, with deliveries stretching into 2027

Demand continues to be stronger than supply at Mercedes-Benz India, and the company could have sold another 1,000 vehicles if it had received adequate supplies of the CLA electric vehicle (EV), said its Managing Director (MD) & Chief Executive Officer (CEO) Santosh Iyer on Monday.

 

The German carmaker has more than 1,000 orders for the CLA, with deliveries now stretching into March-April 2027. “The (overall) demand is still there for double-digit growth. I think it's more on the supply side that we are not able to cater,” Iyer said in an interview with Business Standard.

 

Mercedes-Benz India delivered 15,190 vehicles during January-September 2026, an 8 per cent year-on-year (Y-o-Y) increase. It also recorded its highest-ever quarterly sales of 5,422 vehicles in July-September, up 6 per cent Y-o-Y. The company said its core, top-end and entry luxury businesses all contributed to the growth.

 

Iyer said the strength of demand has made “high-single-digit growth” achievable. “We always had a prognosis of single-digit growth for the year, considering all those uncertainties. We have already done three price increases, the last one being on October 1 now, but we still see a very strong momentum for the overall order intake,” he noted.

 

The CLA electric has become a major driver of Mercedes-Benz's EV business in India. The company said its battery-electric vehicle (BEV) portfolio grew 16 per cent during January-September despite limited vehicle availability.

 

The supply constraint is largely linked to strong global demand for that vehicle, Iyer said. Mercedes-Benz India depends on allocations from its global organisation, while demand for the CLA — which is imported as a completely built unit — has also exceeded expectations in Europe.

 

“We are fully dependent on the allocations that we get. But we are quite happy that we will get these allocations in the first quarter of next year. Next year, the electrified portfolio will be significantly higher or almost double from what we have today,” he noted.

 

Mercedes-Benz will add to that portfolio with the launch of the GLC EV on November 4. The company is also beginning deliveries of the electrified S-Class this month.

 

Despite the rise in EV demand, Mercedes-Benz is seeing strong demand across different powertrains. Diesel accounted for about 40 per cent of its January-September sales, up from around 37-38 per cent earlier, while petrol accounted for about 50 per cent. Iyer said diesel sales could have been higher because the company has faced a supply shortage over the past two months.

 

“For us, we have to look at what the customer needs in every segment. The good part is, as a brand, we have all the powertrains in the portfolio. And when we look at the top-end luxury segment, they're the customers who would love to have electrified powertrains, but they would not like to get stranded,” he said.

 

Mercedes-Benz is using plug-in hybrids as another option for customers who want electric driving but remain concerned about charging. A plug-in hybrid combines an electric motor and battery with a conventional combustion engine.

 

Iyer said the technology can allow daily driving in electric mode while retaining the combustion engine when charging is not available. He estimated that plug-in hybrids cost about 6-8 per cent more than conventional combustion-engine vehicles.

 

The company is also expanding its top-end luxury portfolio. Its top-end models, including the S-Class, Mercedes-Maybach, EQS Maybach SUV, G-Class, V-Class and AMG range, accounted for more than 25 per cent of sales in January-September and grew 13 per cent Y-o-Y.

 

Mercedes-Benz does not want to chase sales through heavy discounting. Iyer said the company would rather protect the value of its vehicles and their resale prices than cut prices to gain market share, particularly in the ₹50-70 lakh segment.

 

“We clearly want value over volume, and we would like to see a more structural growth in the luxury car segment than just trying to reduce price at some 50 lakhs or at certain price points and try to acquire market share. More importantly, more than the price, there is absolute significant discounting happening in that segment of 50 to 70 lakhs,” he said.

 

The strategy does not mean Mercedes-Benz is moving away from entry-level luxury vehicles. The segment, comprising the GLA and CLA EV, accounted for about 15 per cent of sales in January-September and grew 4 per cent. The company said the segment's products are aimed at younger customers and focus on features and equipment rather than simply offering a lower-priced Mercedes-Benz.

 

The West Asia conflict has also affected Mercedes-Benz's logistics. Iyer said shipments from Europe to India that previously took around four to six weeks now take about six to eight weeks. The company has not faced a component shortage because of the conflict, but longer transit times and higher logistics costs have added pressure to its supply chain.

 

Mercedes-Benz India on Monday launched the new electrified Mercedes-Maybach S-Class, expanding its top-end luxury portfolio as the company sees strong demand for Maybach models in India.