Mercedes India CEO says upcoming free trade deals will boost car demand

Bengaluru: Upcoming free trade agreements (FTAs) will boost consumer demand through lower prices and help Mercedes-Benz India sell more cars, said Santosh Iyer, CEO of the luxury vehicle maker.“Free trade agreements will give India access to different markets… That effect should help boost overall demand and consumer sentiment, which will help us sell more cars. It’s like when road infrastructure grows, luxury cars will sell more,” Iyer told ET.

His comments take on significance as the company reported a revenue decline in 2025 for the first time in five years.

The German carmaker’s sales in India fell 3% to 19,007 units last year. But the company retained its top position with around 36% of the luxury car market, although rival BMW significantly narrowed the gap with a 34% share, as ET reported last week.

Entry-level models led the volume decline, falling 23% amid a price war in the segment, Iyer said.

Although unit sales fell, the carmaker achieved record sales in India by focusing on premium offerings. Luxury models such as the S-Class, Maybach and AMG variants recorded double-digit growth. Sales in the performance-oriented AMG line rose by more than a third, while electric vehicles gained popularity with improved sales, as previously reported by ET.

Mercedes-Benz considers top models to be an important contributor to sales in most regions where the company operates. “Even in tier 2 and tier 3 cities, people are still buying G-Wagons and Maybachs,” Iyer said.

The company recently announced that it will open 20 outlets in three Indian cities where it currently has no stores. As we build on this premium strategy, “we plan to localize two more cars in the premium segment,” Iyer said.