Mercedes-Benz India has started the fiscal year 2025–26 with an impressive performance. For the quarter ending June 2025 (Q1 FY26), the German luxury carmaker recorded its best-ever Q1 sales by retailing 4,238 vehicles in India, marking a 10% year-on-year growth. This performance highlights the growing appetite among Indian consumers for luxury vehicles, fueled by increasing disposable incomes, expanding service networks, and a shift toward premium electric vehicles.
The strong performance in Q1 FY26 is attributed to rising demand across three key areas—core luxury models, top-end luxury vehicles, and battery electric vehicles (BEVs). Mercedes-Benz India has consistently emphasized its premium positioning, choosing to focus on high-end and technologically advanced models rather than lower-margin entry-level offerings.
Core Segment: The Backbone of Sales
The core segment, which includes popular models like the C-Class, E-Class Long Wheelbase (LWB), GLC, and GLE, saw a 10% growth in Q1 compared to the same quarter last year. These models continue to form the majority of Mercedes-Benz India’s sales volume, contributing approximately 60% of total units sold.
The E-Class LWB remained a strong performer, particularly in its E450 performance variant. The segment’s popularity underscores the Indian market’s preference for spacious sedans and midsize luxury SUVs that combine performance, technology, and comfort.
Top-End Luxury: Leading the Premium Charge
The top-end luxury vehicle (TEV) segment grew by a notable 20% in Q1 FY26. This category includes the S-Class, Mercedes-Maybach sedans and SUVs, AMG performance vehicles, and the EQS line of electric cars.
Some of the high performers in this segment included the Mercedes-Maybach EQS SUV, the G 580 with EQ technology, and the limited-run AMG G 63 Grand Edition. In fact, the AMG GT 63 PRO was sold out for the entire year within the first month of its launch, signaling robust demand for ultra-exclusive models.
This performance validates Mercedes-Benz India’s premiumisation strategy, which aims to offer only the most feature-rich, high-performance vehicles rather than attempting to compete in the lower-priced segments.
Electric Vehicles: EV Adoption Accelerating
A standout trend in the Q1 results was the exponential growth in the company’s electric vehicle sales. Mercedes-Benz India reported a 157% increase in BEV sales, with electric models now accounting for 8% of total sales volume.
Models such as the EQS 580, EQB, and EQE SUV are gaining traction among urban buyers who are looking for zero-emission luxury alternatives. Mercedes-Benz’s decision to focus solely on premium electric vehicles—priced above ₹65 lakh—appears to be paying off as the segment matures.
CEO’s Perspective
Santosh Iyer, MD and CEO of Mercedes-Benz India, emphasized that the brand’s performance in Q1 FY26 validates its long-term strategy of premiumisation and technological innovation. He credited the balanced contribution from core, TEV, and BEV models, along with a strong product mix and a consistent customer experience, as key drivers of success.
He also highlighted that Mercedes-Benz India has no plans to enter the budget EV segment. Instead, the company is committed to offering electric models with high range, advanced features, and the luxury experience Mercedes customers expect.
Strategic Highlights Driving Growth
Mercedes-Benz India has made several strategic moves that have bolstered its market presence and consumer appeal:
- Premium EV Focus: All EV models are priced at ₹65 lakh and above. There are no plans to develop or localize budget EVs, which helps the brand maintain its premium identity.
- No Feature Dilution: Even in the core segment, Mercedes-Benz has retained full-featured trims without compromising on quality or features to cut costs.
- Tier-2 and Tier-3 Expansion: The company is expanding its service footprint with 19 new service centers in cities like Agra, Jammu, and Patna, ensuring better after-sales support beyond metros.
- Financial Flexibility: Despite two price hikes this year (January and July), financing options and an expected reduction in interest rates by the RBI have helped maintain EMI affordability.
- Strong Supply Chain Management: With sourcing from Germany and localized support, the company has managed to keep delivery timelines intact, with any waiting periods caused primarily by high demand.
Implications for India’s Luxury Auto Market
The performance of Mercedes-Benz India in Q1 FY26 is a strong signal of the changing dynamics in the Indian automobile landscape. While luxury cars account for just over 1% of the total annual vehicle sales in India, that number is poised to grow.
Factors contributing to this shift include:
- A Growing Affluent Class: With more high-income individuals in metro and non-metro cities, demand for luxury cars is steadily rising.
- EV Acceptance in Premium Segment: As infrastructure improves and awareness grows, high-end EVs are becoming more attractive. Mercedes’ lead in this space gives it a significant first-mover advantage.
- Festive Season Momentum: With major festivals and the traditional Indian wedding season approaching, luxury carmakers like Mercedes-Benz are likely to see an uptick in demand in the second half of FY26.
- Brand Loyalty and Aspirational Value: Mercedes-Benz continues to enjoy a strong brand image, particularly among young, upwardly mobile professionals who view car ownership as a lifestyle statement.
What Lies Ahead
Mercedes-Benz India plans to launch new high-performance and electric models in the coming quarters, including locally assembled EVs from its Chakan facility in Maharashtra. These developments are expected to make premium EVs more accessible while reinforcing the brand’s luxury positioning.
With sustained momentum, strategic expansion, and a clear vision for the future, Mercedes-Benz India is poised for continued growth in FY26. The combination of premium product offerings, EV leadership, and expanding market coverage makes it a standout player in the Indian automotive industry.
Conclusion
Mercedes-Benz India’s Q1 FY26 performance is more than just a sales achievement—it is a reflection of a successful business model built around luxury, innovation, and sustainability. As the Indian automotive market matures and the demand for high-end vehicles expands, the brand is well-positioned to lead the charge, both in combustion and electric mobility.
For consumers and investors alike, Mercedes-Benz India’s growth trajectory in 2025 serves as a strong indicator of the opportunities that lie in the intersection of premium automotive engineering and evolving consumer preferences.