German luxury carmaker Mercedes-Benz will invest another ₹200 crore in India. This takes its total investment here to ₹3,200 crore. It also launched an electric version of its GLC SUV, priced from ₹78.5 lakh, with over 1,000 bookings received before the price was announced.
The bigger message came from global chairman Ola Kallenius. He said Mercedes may buy more parts and technology from India for its factories in other countries. Over time, that could mean new business for Indian suppliers.
What Mercedes announced
According to The Hindu, the company announced the new investment on Wednesday, along with the GLC launch. According to The Hindu BusinessLine, the money will strengthen manufacturing and localisation at its Chakan plant near Pune. Before this, the commitment stood at ₹3,000 crore.
Localisation means making or buying more car parts inside India instead of importing them. Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, did not say exactly how the ₹200 crore will be split. He said the company had invested in the electric GLC and its supplier network.
According to Economic Times, the Chakan plant covers 100 acres. It assembles more than 11 models from completely knocked-down (CKD) kits. Indian vendors already supply engines and axles. BusinessLine said glazing parts for the E-Class, such as the sunroof and side windows, are also now made locally.
Sales and bookings in numbers
| Item | Number | Reported by |
|---|---|---|
| New investment this year | ₹200 crore | All three publishers |
| Total investment in India | ₹3,200 crore | All three publishers |
| Sales, January–September 2026 | 15,190 vehicles, up 8% | Economic Times, BusinessLine |
| Sales, September quarter 2026 | 5,422 vehicles, up 6% | Economic Times |
| Electric GLC starting price | ₹78.5 lakh | The Hindu |
| Electric GLC bookings | Over 1,000 | The Hindu, BusinessLine |
| Electric CLA bookings | Over 1,000 | BusinessLine |
The table shows that sales are growing at a steady pace, while bookings for the new electric models are strong.
According to Economic Times, Kallenius said Mercedes is on course for its highest-ever yearly sales in India if the current pace continues. The September quarter was already its best ever.
The Hindu said the electric GLC can run 711 km on one charge. Ten minutes of charging adds enough energy for 300 km. BusinessLine said GLC allocations are used up until March 2027. This means all the cars set aside for India up to that month are already booked. "Our challenge is to get the products to the market," Iyer told BusinessLine. He also said over 1,000 buyers booked the car without a test drive. He called this a change from 12 to 24 months ago.
How Mercedes compares with BMW
BusinessLine cited Vahan registration data compiled by Flash Finance. Vahan is the government's online record of registered vehicles. It shows rival BMW well ahead in electric cars.
| Brand | Electric cars registered | Growth | All cars registered | Electric share |
|---|---|---|---|---|
| BMW | 4,134 | 48.9% | 17,237 | Nearly 24% |
| Mercedes-Benz | 1,384 | 9.5% | 16,300 | 8.5% |
The table covers January–October 2026 and compares each brand's growth with the same period last year.
By our calculation, BMW registered 937 more cars in total and 2,750 more electric cars. Iyer questioned these figures. He pointed to incomplete updates from Telangana and changes in how data is reported. He said company-declared sales give a fairer comparison. Note that the Vahan data runs to October, while the company's 15,190 figure runs only to September. So the two numbers cannot be compared directly.
Why India matters to Mercedes worldwide
"It's more likely than not that we will use India as a source also for a supply base outside of India," Kallenius told Economic Times. He told The Hindu that Mercedes can export parts from India before it exports full cars.
On car exports, he said it is "a question of when as opposed to a question of if." But he stressed that no such decision has been made. The company will first wait for sales in India to grow. He also said making the cars part by part in India has not been decided.
The reports differ on the research centre. Economic Times said Mercedes-Benz Research and Development India, which has completed three decades, is the company's second-largest engineering centre outside Germany. The Hindu quoted Kallenius calling the Bengaluru centre the biggest R&D centre outside Germany. We could not confirm which is correct. Readers may check the company's official statements. Both reports agree its role will grow.
Other global firms are also looking at Indian suppliers. Read our story on Airbus's India sourcing plan.
What it means for a common investor
This is a plan, not a profit report. The main interest for Indian investors lies in parts makers. If Mercedes buys more from India for its global plants, local suppliers could get bigger orders. However, none of the reports named any supplier.
The luxury car market is still small. Kallenius told Economic Times it sells about 60,000 vehicles a year, just over 1% of India's passenger vehicle market. Iyer estimated luxury car sales grew about 10–11% in January–October, against about 17–18% for all passenger vehicles. Mercedes expects single-digit growth in calendar 2026. For more company news in plain words, visit our business section.
Risks to keep in mind
- Supply limits: Iyer himself said getting cars to the market is the challenge, not demand.
- Competition: BMW leads in electric registrations, even if Mercedes questions the data.
- Not yet decided: Car exports and deeper local manufacturing are ideas, not firm decisions.
- Slow segment: By Iyer's estimate, luxury cars are growing slower than the overall car market.
- Changing technology: Kallenius called the shift to zero emissions a disruption. He said diesel engines, now built to EU7 standards, will stay for the foreseeable future. Iyer said electric cars could make up 20–25% of the business with a wider range and enough supply.
What to watch next
- Whether full-year 2026 sales set a new record, as Kallenius expects.
- How quickly electric GLC deliveries reach buyers.
- Any decision on exporting parts or cars from India.
- New registration data showing whether the gap with BMW narrows.
Words explained
- Localisation: Making or buying parts within India instead of importing them. It can lower costs and import delays.
- CKD kit: A car shipped as separate parts, then put together at a local factory.
- Electric vehicle (EV): A vehicle that runs on a battery instead of petrol or diesel.
- Allocation: The number of cars the company sets aside for a market or period.
- Vahan: The government's online database of registered vehicles in India.
- Research and development (R&D): Work done to design new products and improve existing ones.
- EU7: A European rule on how much pollution a vehicle engine may release.
- Passenger vehicle: Cars, SUVs and vans made to carry people, not goods.
Sources: Economic Times, The Hindu BusinessLine, The Hindu.
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