Mercedes-Benz India at Rising Bharat Summit: 'China market is very different…'

On the Rising Bharat Summit 2026 in New Delhi on Friday, the management of Mercedes-Benz India delivered a quick view of the corporate’s strategic route in India amid a reworking international automotive atmosphere.

Managing Director and CEO Santosh Iyer addressed how Mercedes is repositioning itself within the subcontinent.

As Mercedes-Benz India stepped into 2026, its focus developed from sheer quantity to a value-driven luxurious agenda. The corporate’s efficiency lately — together with report income, a widening product portfolio, and stronger localisation — displays this shift.

How Mercedes-Benz India has carried out

Regardless of registering a modest decline in whole quantity, Mercedes-Benz India capped the calendar 12 months 2025 with its highest-ever income — simply shy of $1.5 billion.

In accordance with firm knowledge, Mercedes India reported 19,007 models bought in 2025, a slight dip from 19,565 in 2024 — equating to a virtually 2.85 perc ent year-on-year drop.

What stands out, nonetheless, is the place progress occurred. High-end automobiles — these priced above ₹1.5 crore, together with the S-Class, AMG efficiency variants, Maybach and EQS electrical fashions — contributed disproportionately to income positive aspects and model positioning.

These premium fashions expanded by round 11 per cent in volumes, now representing roughly 1 / 4 of whole gross sales. AMG automobiles alone grew by 34 per cent, a marker of accelerating enthusiasm in India for efficiency luxurious automobiles.

On the identical time, the “Core” section — dominated by fashions such because the E-Class lengthy wheelbase and GLE SUV — continued to be the spine of Mercedes’ India operations, accounting for about 62 per cent of gross sales in 2025.

Business analysts additionally observe that diesel variants have seen resurgence in demand following India’s GST 2.0 reforms, with diesel choices accounting for an estimated 43 per cent of Mercedes’ gross sales combine — a notable determine in a world panorama the place diesel is declining.

How Mercedes-Benz India sees the India-EU FTA

One of the crucial consequential international commerce developments affecting Mercedes and the Indian automotive market at giant is the just lately concluded India-European Union Free Commerce Settlement (FTA), introduced on January 27 after practically 20 years of negotiations.

On the Rising Bharat Summit, Santosh Iyer emphasised that commerce agreements needs to be considered broadly as platforms for holistic financial engagement relatively than mere tariff discount instruments.

“FTAs whereas folks solely clock when it comes to discount of tariffs, however as we take a look at the varied international locations the place FTAs are being finished, it’s making a enterprise platform which opens engagement in addition to investments.”

“It’s not only a government-to-government however a business-to-business partnership.”

Underneath this landmark pact, import duties on totally constructed European automobiles have been dedicated to being slashed from their traditionally steep peaks of as much as 110 per cent right down to as little as 10 per cent over time, below particular quota programs masking roughly 250,000 automobiles yearly.

Nonetheless, the transition is gradual. Within the first part, quick tariff cuts to about 40 per cent have been agreed for a restricted variety of imported automobiles, with additional reductions reaching 10 per cent over subsequent years, topic to quota and regulatory situations — a method designed to liberalise commerce with out overwhelming the home trade.

“FTAs aren’t about obligation discount. Now we have at all times advocated open borders and that’s the basic cause for international financial progress. The actual potential of India is to have the ability to take part in developed economies and we have now ready India already,” Iyer added.

Whereas this transfer guarantees to boost market entry for European automakers like Mercedes-Benz, BMW and Volkswagen, consultants warning that widespread value reductions for many imported luxurious automobiles could not materialise in a single day.

That’s as a result of a big share of premium automobiles bought in India is already regionally assembled or falls below tariff protections throughout phased implementation.

Due to this fact all Mercedes fashions could not develop into considerably cheaper in India purely due to the FTA, notably given localisation and GST implications, in addition to residual duties and different taxes.

However, the pact’s deeper significance lies past quick pricing. Expanded market entry below the FTA is anticipated to spice up Indian automotive exports into the EU — which have been gaining momentum, recording $2.2 billion in shipments between April and December 2025, up from $1.6 billion in 2024.

“There’s a clear dialogue about safety of investments for European firms in India, that additionally means extra capex and extra progress momentum. FTA might be one of many greatest sport changers within the subsequent couple of months if not years,” Iyer identified.

Past cars, the India-EU FTA reduces or eliminates tariffs on a variety of products from processed meals to industrial merchandise, positioning it as one in all India’s most sweeping commerce pacts or as it’s being touted — the “mom of all offers”.

India vs China: Mercedes’ market palette

Evaluating Mercedes-Benz’s strategic positioning and efficiency throughout India and China reveals contrasting market dynamics.

China has lengthy been Mercedes-Benz’s largest single market globally. The corporate bought roughly 551,900 to 575,000 models throughout China in 2025, highlighting the large distinction in quantity in relation to India.

The automotive ecosystem in China is outlined by large capability,
intense competitors from home electrical car (EV) producers, and powerful governmental emphasis on scale manufacturing and aggressive localisation.

Value-competitive homegrown EV manufacturers have pressured conventional luxurious volumes, contributing to gross sales declines for some overseas producers lately.

Mercedes management has famous that China’s market construction — closely influenced by state intervention, subsidy frameworks and production-oriented progress — differs markedly from India’s market evolution.

On the summit, Iyer summed up this distinction, stating, “China’s progress was state-led with a number of capex and subsidies. Targets for manufacturing have been set. Whereas India’s progress is shopper economy-led. China has overcapacity now. It’s extra structural in India — a bit slower than imagined — however the runway is there,” he defined.

“The most important change level within the final 20 years is decarbonisation,” he stated. “China didn’t have that agenda as a lot as what India has for progress.”

In distinction, India’s luxurious market is characterised by sustainable, demand-led progress, sturdy curiosity in premium and efficiency automobiles, and rising earnings profiles in city centres.

India’s luxurious volumes — whereas smaller in scale than China — have proven resilience and a strengthening foothold for manufacturers like Mercedes-Benz, particularly when paired with deep localisation that retains pricing aggressive.

This positioning is mirrored in Iyer’s remarks, as he said, “In the event you solely take a look at the amount from one single prism, it could not sit proper. However structurally, it’s exhibiting a really constructive development.”

“FTAs aren’t about obligation discount. Now we have at all times advocated open borders and that’s the basic cause for international financial progress. The actual potential of India is to have the ability to take part in developed economies and we have now ready India already,” Iyer stated.

“The automotive ecosystem right here could be very sturdy. The stability of commerce of auto elements to Europe is constructive for India. We’re exporting to Europe greater than importing from there,” he famous.

Not like China’s market, India’s regulatory atmosphere has not relied on heavy subsidies for pure EV adoption, which has led to extra balanced demand between inside combustion engine (ICE) fashions, diesel variants, and electrified automobiles — particularly within the luxurious bracket.

This India-China distinction explains why Mercedes is more and more viewing India not simply as a robust progress market however as a strategic hedge, particularly given China’s slower luxurious gross sales progress in 2025 and aggressive value dynamics from native EV manufacturers.

“From a low-selling, cheaper automobiles to right now our common promoting value is coming to Rs. 1 crore,” Iyer revealed.

How Mercedes-Benz India is increasing regionally

Mercedes-Benz India continues to deepen localisation, each on meeting and know-how fronts. A major proportion of its portfolio is assembled regionally through CKD (utterly knocked down) operations, which helps maintain efficient tariffs decrease than for totally constructed imports.

This localisation additionally shields many fashions from quick impression below new commerce agreements and is aimed toward highlighting India’s rising significance as a manufacturing hub.

Business knowledge suggests that just about 95 per cent of luxurious automobiles bought in India that qualify below the premium section are regionally assembled, that means that the majority of tariff reductions below new commerce pacts will profit area of interest imports greater than the mass of regionally constructed automobiles.

The corporate has additionally invested in its Bengaluru-based R&D centre, which performs an more and more vital function not only for home innovation however for international Mercedes programmes.

This contains work on digital programs, superior driver help capabilities, and linked automobile applied sciences — areas the place India’s engineering expertise is very aggressive.

Mercedes has introduced a sturdy product growth roadmap for 2026, with as much as 12 new launches deliberate throughout combustion, electrified and efficiency variants.

These embody the regionally important Mercedes CLA electrical car (EV), set to redefine the model’s entry EV positioning in India, as just lately confirmed by a number of automotive sources.

The News18 Rising Bharat Summit, one in all India’s flagship occasions on present affairs is being held at Bharat Mandapam in New Delhi from February 27, 2026 to February 28, 2026.