Luxury car manufacturer Mercedes-Benz recently announced that they would be increasing the prices of their entire product line up, which will be effective from May onwards. This price increase is to offset the company’s rising costs of input and the adverse impact of the fluctuating currency.
Peter Honegg, the CEO and Managing Director for Mercedes-Benz India, said that all of Mercedes’ products will have revised prices from May onwards for their Indian market. The increasing input costs coupled with fluctuating exchange rates and the impact of inflation has a bearing on the final cost of the product.
He added that they while they have absorbed these to a certain extent but at some point of time they will have to pass on this cost impact to their customer. The company has, however, not yet specified about how much the cost would be increased by, though it is understood that the rise across all models would be by at least 1.5 to 2 per cent.
Mercedes has a huge array of models on offer for their Indian market. These include the S Class, E Class and Class, as well as the luxury Maybach sedan, with a price tag ranging from Rs. 25.47 to Rs. 5.85 lakh, according to Delhi ex-showroom. Meanwhile, Mercedes’ biggest rival BMW as well as Audi are reportedly not planning on increasing their price any further, as of now.
Luxury car manufacturers who import CKD or completely knocked down units and then assemble them over here, have been receiving a lot of pressure on their margins, after the government revised the CKD’s import duty in the last fiscal Budget. In regards to pre-assembled gear boxes, transmissions and engines, the import duty was increased to 30% against the earlier 10%.
Meanwhile other car parts continue to attract a custom duty of only 10%. Whereas wholly imported cars, which come through a completely built unit course attract a 60% custom duty.