Mercedes-Benz India Says Luxury Car Prices May Drop 5-8 Per Cent After GST Cut News24 –

Mercedes-Benz India’s Managing Director and CEO, Santosh Iyer, has said that the prices of luxury cars are expected to drop by 5-8 per cent as a result of the Goods and Services Tax (GST) reforms.

With GST remaining at 5 per cent, electric vehicles (EVs) stay unaffected, while combustion engine vehicles, including strong hybrids, will benefit from the rate cuts.

“We used to have combustion engine at 48 to 50%, including the cess, and strong hybrids at 43%. Now, with the standardisation, everything comes to 40%,” Iyer told CNBC-TV18.

He said that the brand is currently working on the revised pricing and the list is expected to be released shortly. “The pricing impact will be 6 to 8%… we are trying that by late night, we should be able to come out with a new pricing for all our car lines,” he said.

He called the new GST reforms “much simpler”, saying they reflect the government’s policy clarity as EVs retain their preferential rate and ICE vehicles are grouped with hybrids. “It’s much simpler now. There is no third element of hybrids-it’s either EVs or ICE,” Iyer said.

But there are still concerns about dealer inventory. Since older stock is taxed at higher rates, dealers could end up losing nearly Rs 2,500 crore. The finance ministry has admitted the problem and is likely to announce a solution soon.

Still, Iyer said Mercedes-Benz is expecting its “best-ever festive season,” helped by stronger demand and lower prices.

However, he cautioned that volatile exchange rates could reduce the impact of the tax cut. “The euro to rupee has not been strong, and that impacts imported components. While prices will fall now, if the exchange rate continues at current levels, there could be upward pressure in the coming months,” Iyer warned.

ALSO READ: New GST Rates On All Cars In India, From Alto To Mahindra Thar And Tata Nexon