While launching the new Mercedes-Benz S-Class in India on Monday, the automaker expressed confidence in sustaining growth in 2026, citing strong demand despite macroeconomic headwinds and geopolitical uncertainties. The OEM also said that a price hike is on the cards.

The Pune-based Indian arm of the luxury carmaker launched the 2026 Mercedes-Benz S-Class facelift in the country at a starting price tag of ₹2.20 crore (ex-showroom). The full-grown luxury sedan comes with hybrid tech, which makes the car the brand's first-ever plug-in hybrid model in India. The new S-Class, which is capable of running 115 km in pure electric mode, thanks to the onboard battery pack, is already available for booking, and its deliveries will commence during Diwali this year.

The top luxury carmaker in India also revealed that it wants to continue the launch momentum, and of the 12 product launches announced at the beginning of the year, almost 8 -9 have already been rolled out, and the remaining 3- 4 launches this year will have both ICE and EV cars.

Strong demand to fuel sustainable growth

Mercedes-Benz is pretty confident about sustainable growth in CY2026. The automaker is betting big on the strong demand for products this year, despite the macroeconomic headwinds and geopolitical uncertainties, Mercedes-Benz India MD and CEO Santosh Iyer told PTI in an interaction. "We started the year with a prognosis of growth, and we still continue that. Last time we said there would be a single-digit growth for the year. We are confident that we will deliver growth this year as well, and that also includes growth in the first half of this year," he said, while also adding, "We feel there would be growth coming in, in spite of what is happening on the macroeconomic and geopolitical side. So the demand continues to be strong."

Mercedes-Benz India registered a 7% year-on-year (YoY) growth in total sales at 5,131 units in the Q1 (January-March) CY2026, as compared to 4,775 units sold in the corresponding period last year. In CY2025, the automaker posted a 2.85% YoY sales slump at 19,007 units, down from 19,565 units registered in CY2024. On the contrary, the OEM posted its best-ever fiscal sales of 19,363 units in FY26 as compared to 18,928 units in FY25.

H1 CY2026 performance to determine growth percentage

When asked whether the company is expecting high single-digit or lower growth this year, Iyer said that the sales performance in the first half of this year will determine the course. However, he also said that it is very difficult to put a clear number considering multiple challenging factors like geopolitical uncertainties, fluctuating foreign exchange rates, price hikes, etc. "The H1 (January-June 2026) numbers will determine some course for sure, but it is an unstable market not just from a macroeconomic perspective or geopolitical, but also from exchange rate, price increases, so very difficult to put a clear number," he said.

Iyer further said that as long as the sentiments are positive, a larger number of customers are buying cars compared to the previous year, average selling prices are going up, the market is moving towards premiumisation, and the top-end vehicle share for Mercedes-Benz is going up significantly. "But I think as long as the sentiments are positive, more number of customers are buying cars compared to previous year, the average selling prices are going up, premiumization is happening in the market, our TEV (top-end vehicles) share is going up significantly, that shows that the average selling price would have gone up significantly high, so I think these are positives that we need to see," he said.

Mercedes-Benz CLA recording significant demand

During the interaction, Iyer said that the Mercedes-Benz CLA has been registering significant demand and sales for the company. He said that with the new CLA, the brand is seeing a significant demand, which, in fact, resulted in the PHEV being completely sold out till October-November this year.

Major focus on electrified powertrain

Mercedes-Benz India's MD & CEO said that the company is increasingly focusing on electrified powertrains. The electric vehicle penetration in the company's top-end vehicles now accounts for 20% and is growing strongly, while the overall penetration would have exceeded close to 10% already, Iyer said, adding that the EV sales grew by double digits compared to last year. He said that as much as 27-28% of Mercedes-Benz India's total volumes come from the TEV segment or cars that are priced above ₹1.5 crore.

The company's EV sales dropped 10% YoY in FY26, which it attributed to the discontinuation of imports of certain electric CBUs. However, there will be many more electric cars coming to the portfolio, stated Iyer, while also adding that overall in the EV segment, the company is growing.

He said that with the new S-Class launch, the company introduced a new powertrain with hybrid technology in India, which reinforced a powertrain agnostic strategy for the domestic market. "So, we are going beyond electrics, petrol and clean diesels; we are now introducing a new option for the customer as well," he said, while adding that the company is offering only plug-in hybrid as an option to the customer, so that they can switch to a multi-powertrain strategy.

Another price hike on the cards

Mercedes-Benz India has already undertaken two price increases in 2026, and a third may be around the corner, hinted Iyer. He said, "We still feel demand and sentiment are positive and growth should continue." The premium car maker said that a price increase was on the cards to deal with the impact of sustained pressure on the Indian Rupee, among others.

Iyer said that despite the West Asia conflict, supply chain and logistics both have worked extremely well for the company to ensure that the demand is taken care of to a large extent, but added that "we have a higher cost coming in because of the disruptions, but we had enough buffer stocks, etc., to cater."