Mercedes Clocks Surge in Demand for Diesel Cars
Diesel vehicles sales have risen from 29 per cent to 40 per cent of the total sales since the GST reduction implemented in September, he said, noting that taxes play a big role in sales.
Pune: After a lull period, Mercedes-Benz, India’s biggest German luxury car maker, is clocking a surge in its diesel car sales after the 6 per cent Goods and Services Tax cut on luxury petrol and diesel vehicles in the world’s third largest automobile market.
“There is a sudden spurt in demand for diesel despite a price difference of Rs 2 to Rs 2.5 lakh between petrol and diesel luxury vehicles,” Santosh Iyer, MD and CEO of Mercedes-Benz India told Financial Chronicle.
Diesel vehicles sales have risen from 29 per cent to 40 per cent of the total sales since the GST reduction implemented in September, he said, noting that taxes play a big role in sales.
“Gujarat led this recovery, with customers shifting decisively back to diesel,” Iyer pointed out. “In fact, we are facing a shortage of diesel cars to meet the rising demand,” he said, adding that the production has been ramped up to reduce waiting periods.
“Customers across India who had postponed purchases since the August GST cut announcement contributed to strong September–October sales,” Iyer noted.
However, the overall growth forecast for the year remains muted, he said, adding that there would be “stronger growth” next year.
Looking ahead, Iyer expects 2026 to deliver stronger growth, aided by GST-led demand recovery, rising diesel share, and increasing acceptance of EVs in the top-end segment.
Mercedes is also planning to hike prices of its cars in 2025 as it “continues to face cost pressures from energy, logistics and currency volatility”. Having taken 2–3 price hikes in 2025, Mercedes would increase prices in 2026, spread over quarters without indicating price point.
Iyer confirmed that the new CLA model would be launched in Q1 2026. It will be the brand’s first software-defined vehicle with MB.OS, offering a range of about 800 km.
MB.OS is Mercedes-Benz's new, in-house developed operating system designed to integrate all vehicle functions, including infotainment, automated driving, body & comfort, and driving & charging, into a single chip-to-cloud architecture.