New Delhi: Mercedes Benz India plans to hike prices by 1-1.5 per cent from September to mitigate the impact of a weak rupee against the euro, according to its MD and CEO Santosh Iyer.
The luxury car market leader has already hiked vehicle prices twice this year, first in January and then in July.
"There is another price hike coming up in September, because of the euro. If you see, the last one month has remained at the 100 mark (INR), and that has not changed. Therefore, we will have to undertake an increase as well in September," Iyer told PTI in an interaction.
The price hike is expected to be in the range of 1-1.5 per cent, he added.
When asked if the increase in prices could impact sales, Iyer stated that the reduction in interest rates is somehow balancing the monthly outgo for buyers in equated monthly instalments (EMIs).
Around 80 per cent of the company's new car sales are financed, he noted.
"So, when you look at the EMIs, we have tried to keep the same, though the price of the car has gone up. So, that helps us to mitigate the impact of price increase to a large extent," Iyer said.
He noted that there is still demand in the market, and with the economy growing, people will like to buy luxury cars.
Buyers understand that prices are beyond the control of the company, considering the currency fluctuation, he noted.
When asked if the company is facing production issues due to rare earth magnets, Iyer said: "If you look at the supply chain, as far as we are concerned, we are not affected yet by any of these topics, because we are managing it well. We also have sufficient stocks with us, so we are able to navigate and manage it".
"I think our colleagues back in Stuttgart (Germany) have managed it well, so we don't have any issues there." Iyer noted that the company's growth could be flattish this year due to ongoing geopolitical issues and other challenges.
He said that while the overall passenger vehicle market has been growing by 2-3 per cent, the luxury car segment has seen higher growth at around 5-6 per cent this year.
"Of course, one would love much higher growth rates, but considering what's happening worldwide geopolitically, I think growth in the automotive industry by itself is a positive sign as such," Iyer stated.
"And we all have to realise the average selling price is going up on the mass market side due to regulation and on the luxury side, due to currency fluctuations," he added.
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