In an interaction with PTI here, Iyer noted that to help cost reduction measures to drip to the end customer, a uniformity is required in road tax that is levied by states throughout the country.
As he welcomed the GST rationalization, he pointed out that the automotive sector remains one of the highest taxation, with state taxes ranging from 15 to 22 percent throughout the country.
“The reduction of GST, which has a clear impact on the price of 6-8 percent, would certainly have an impact on the question in the short term, because a delay of purchases should be postponed in August,” Iyer said.
The GST speed reduction brings a lot of positive sentiment and momentum on the market, he added.
“So, in the coming months we will certainly see that the overall luxury market and Mercedes-Benz should see considerable growth. And this festive season should be the best ever,” Iyer said. However, he noticed that at some point even the road taxes should be in the States, and it will never be that there will be no guarantee. No further rise, which could lead to prices that remain higher despite the GST rate.
“India has a federal structure, so that is difficult to implement (uniform road tax), but at least if there is a concept that the taxes on motor vehicles are put off at a certain moment at a certain moment and cannot continue to increase,” he said.
Under the new GST system with effect from September 22, 2025, luxury cars and other large vehicles (more than 1500cc or 4 m long) are taxed at a fixed rate of 40 percent GST, with the removal of the extra compensation monitoring.
Although the GST rate is higher than the previous 28 percent GST, the absence of a compensation stop has led to an overall reduction in the total tax burden, making such models affordable.
Besides, GST, a levying from the central government, the national governments charge their own taxes during the registration process of a vehicle.
“We are very happy to note that there is consistency in the policy, because the 5 percent GST continued on electric vehicles on batteries,” he added.
Iyer noted that the growth of the luxury car industry has a direct correlation with economic growth.
“In the past six years we have sold one Lakh cars in India, and in the total 31 years we have sold two Lakh. So most cars sold in India have come over the past six to seven years. 1.5 Lakh cars in the last 10 years since 2014,” he said.
Between 2014 and 2024, the household per head of the population was on USD 1,550, which increased to USD 2,500. So this clearly shows a direct correlation between GDP per head of the population and growth, “Iyer said.
It is a matter of time that as the economy develops, growth should come in, he added.
“And we don’t see a hockey stick species growth, but I think that sustainable growth, double digits are growing us in the next five to 10 years to much higher numbers,” he said.
The Indian luxury car industry remains small against the total segment of the passenger vehicle and compared to other countries such as China.
Iyer noted that Mercedes is located in the world in the middle of the largest product offensive ever, and various new models would also reach the Indian coasts.
“We produce several cars in Pune. So this will continue when we continue. Our efforts will be to try to see how quickly we can bring these cars to India,” he noticed.
Iyer said that the luxury car maker has invested more than RS 3,000 crore in the country and has sufficient production capacity to ensure the current requirement and in the coming years.
At the FTA of India-EU he noted that the company has always advocated positively for the simple reason that such measures stimulate economic development.
“So after the fundamental reform of GST 2.0, I think FTAs should be the next step, and not just with the EU, but with as many countries as possible, because that will facilitate two -way trade,” Iyer emphasized.
It also means that the Indian manufacturers would have access to global markets, and that can open many opportunities, he said.
“As far as our company is concerned, more than 90 percent of the cars we sell in India are all produced locally. So in that sense it would have a big impact on the 10 percent of the cars, which are imported. But even there we are already most of our cars with almost as close to CKD prices,” Iyer said.
Mercedes-Benz member of the Board of Management of Mercedes-Benz Group AG Mathias Geisen previously told that the Stuttgart headquarters will continue to invest in the ‘Priority Market’ India, without setting up one of its plans, including plans to strengthen local production, in the nasleep of the threatening trade trade.
By terminating the Indian market as a fast -growing market, Geisen noted that the company proposed several scenarios, taking into account the possible outcome of the trade agreement.
as a reliable and trusted news sourceThe European Union is the largest trading partner in India with the bilateral trade in goods with a USD 135 billion in 2023-24.
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