Mercedes-Benz India is weighing E25 readiness, plug-in hybrids and another price hike, says India MD Santosh Iyer

"Not every future Mercedes-Benz vehicle will be automatically E25 compliant," says Mercedes-Benz India MD Santosh Iyer, stating that while certain models in their portfolio, such as the newly launched plug-in hybrid S-Class, are E25 compliant, others will require some engineering.

"We will have to wait for the policy in order to decide, because it depends on whether the technologies are readily available off the shelf.

If not, then we have to see the volume impact and whether there is a business case for developing an engine or a powertrain," said Iyer, before adding, "But I think we were given sufficient time before the E20 deadline, and we will be..."

Iyer did, however, clarify that he is confident the existing portfolio of Mercedes-Benz cars - which was certified E20 compatible long before the government's deadline - does have sufficient engineering margins to comfortably work on slightly higher blends of ethanol, such as E22, should it be rolled out.

More from Auto

"In our case, we are confident in our engineering margins, and customers need not be worried. But I cannot say this for the industry because each OEM will have its own price-value equation, and how they engineer their cars. Is somebody making a minimum viable product for the market, or are they trying to engineer it for a global scale?"

A case for plug-in hybrids

Iyer states that Mercedes-Benz is open to introducing hybrid powertrains to segments other than the top-end one.

At present, the S-Class remains the first and only plug-in hybrid retailed by Mercedes-Benz India, with the S-Class's top-end price point accommodating the inherently higher acquisition cost of such a powertrain.

"Based on the order intake, customers are responding well (to the S-Class); however, the user experience and response will determine at what scale and in which segments to introduce hybrids. If customers are willing to pay a premium, why not introduce it to other segments? We don't have sales targets for any specific powertrain. Customers should choose whichever solution best suits their usage.

That's an advantage Mercedes-Benz enjoys because we offer every major technology," says Iyer, adding, "We have been maintaining for some time now that we allow the customer to decide because, frankly, any change in the TCO, any change in taxation, will change the way consumers adopt electric mobility. There are certain concerns around public charging and range, and those are valid concerns."

Strong demand despite uncertainty

Despite geopolitical instability and the ever-present ethanol bugbear, Mercedes-Benz India reported its best-ever H1 sales, having sold 9,768 units in H1 2026.

Iyer attributed this, in part, to stable interest rates and, in part, to the localisation of popular models such as the CLA BEV, the new V-Class and the GLS, all of which are in short supply in international markets due to overwhelming demand.

"Around 80-85 per cent of Mercedes-Benz purchases are registered in company names. These include SMEs, larger companies and business owners because companies can claim depreciation benefits. Pure fleet or bulk corporate purchases account for around 25-30 per cent of total sales."

Iyer stated that the pre-owned business continues to grow alongside new car sales; however, it is dominated by India's vast unorganised used-car market, as "organised pre-owned operations still account for only about 20 per cent of our business."

Impending price increase

While the brand remains positive about growth in the second half of the year, Iyer does foresee headwinds in the form of a price increase that could potentially affect demand.

"We had planned a third price increase from July 1 but decided to pause because we saw encouraging signs of the exchange rate improving. Unfortunately, it has weakened again, so we may have to increase prices again towards the end of July or in early August."

Iyer also stated that the brand does not intend to heavily discount its entry-level products.

"Across the industry, there are cars with list prices of around Rs 60 lakh that are being sold at Rs 52-55 lakh through aggressive discounting. That is not our strategy. Our customers prioritise value rather than simply the lowest price. The CLA demonstrates this perfectly. The CLA 250 sold out before the CLA 200 despite being significantly more expensive."