BMW closes in on Mercedes in India. It’s a tight race, but on different roads.
- BMW is closing in on longtime leader Mercedes-Benz in India’s luxury car market, with aggressive pricing helping it narrow the sales gap while Mercedes focuses on higher-priced models.
- But in the electric vehicle market, BMW has raced to the top spot this year with its more affordable cars.
German luxury carmaker BMW is closing in on Mercedes-Benz in India’s luxury car market, but their strategies for the top spot could not be more different.
Mercedes, which currently occupies the No.1 position, is focusing on ultra premium cars as it chases higher profits, although sales have hurt recently. BMW, on the other hand, is snapping on Mercedes’s wheels with aggressive pricing.
Their divergent strategies are reflected in a key growth segment for both the carmakers where the battle’s heating up—the electric vehicle market, where BMW’s least expensive vehicle costs about ₹50 lakh and Mercedes’s about ₹70 lakh.
Mercedes has occupied the top spot in India’s luxury car market for about a decade. But in the first nine months of 2025, its sales in India declined 1.72% to 14,132 cars, as per the latest available data from the company. BMW’s India sales, meanwhile, grew 13% to 11,978 cars.
“BMW wants to expand its base while Mercedes wants to retain the exclusivity [of the brand]," Subhabrata Sengupta, partner at Avalon Consulting, said.
Mercedes, which entered India in 1994, has held the top position in the domestic luxury car market except for a brief period between 2009 and 2015, when BMW and Audi occupied the top spot for a few years each. The Stuttgart-headquartered carmaker’s plant in Chakan, Pune can produce about 20,000 cars a year.
BMW, which entered India in 2007, has a plant in Chennai that can produce nearly 18,000 cars a year.
- BMW is narrowing the sales gap with Mercedes in India through aggressive pricing and broader accessibility, while Mercedes focuses on high-end models to maintain exclusivity and boost profit margins.
- In India’s luxury electric vehicle segment, BMW leads with more affordable models driving volume growth, whereas Mercedes remains concentrated on premium EVs.
- India’s overall luxury car market is growing at a decelerated pace, although it reached a sales milestone of 51,000 vehicles in FY25.
Focus on luxury EVs
In India’s luxury electric vehicles market, BMW’s and Mercedes-Benz’s positions are reversed.
BMW leads the domestic segment, having sold 2,509 electric cars in the first nine months of 2025, a 246% growth from the same period last year. Electric vehicles now account for nearly 21% of the Munich-based carmaker’s overall sales in India.
Mercedes’s EVs sales in India grew 41% year-on-year to 1,130 cars between January and September, accounting for 8% of its total sales in the country.
BMW offers six electric cars in India—i7, iX, i5, i4, iX1 Long Wheelbase, and Mini Countryman E. The iX1 and the Mini Countryman, its least expensive EV models, are priced ₹50-60 lakh. BMW i7 and iX, its most expensive electric cars in India, are sold for ₹1.4-2.5 crore.
Mercedes also sells six electric cars in India—EQS Sedan, EQA SUV, EQB SUV, EQE SUV, EQS SUV, and G-Class. The least expensive of these are the EQA SUV and EQB SUV, priced at ₹67.2-72.2 lakh, while its most expensive EV models—the G-Class and EQE SUV—cost ₹1.4-3.1 crore.
All these prices are for the base versions in Delhi, not including taxes, insurance, and other costs.
“One strategy [BMW’s] is to broaden access with EVs at the entry-luxury price band to build scale and lifetime value, and the other [Mercedes’s] is to anchor the top-end to preserve brand aura and margin density," said Harshvardhan Sharma, group head at Nomura Research Institute.
A milestone and a deceleration
Another German luxury carmaker, Audi, too, saw its sales in India drop between January and September this year, by 18% a year ago to 3,197 cars. Latest data for other luxury carmakers in India, including Tata Motors Ltd’s Jaguar Land Rover, were not available.
Overall, India’s luxury car market has been on a slower pace. In the previous financial year, 2024-25, the domestic market for luxury cars—which are typically priced above ₹50 lakh—reached the 51,000 vehicles milestone. However, growth sharply slowed to 3% in FY25 from 16% in FY24, shows data from companies announcements.
“When you are looking at expanding the [EV] market and increasing adoption, whether in luxury or in mass, it will not come from the top-end segment. Top-end segment volume power is limited. Highly profitable, but limited," Hardeep Singh Brar, president and chief executive at BMW Group India, told Mint.
Brar said BMW will double down on its pricing strategy as it has been successful in growing the share of electric vehicles in its portfolio. “We would only like to build on top of this," he said, adding that the company will be able to reach 30% EV penetration in its portfolio by 2030.
While BMW is betting on aggressive pricing to drive volume, Mercedes’s India team is focused on targeting the top-end segment.
“If you have a cheaper car, you can sell much more because there is a set [number] of customers in that pyramid who would like to get a cheaper car and that [luxury car] badge," Santosh Iyer, managing director of Mercedes-Benz India, told Mint.
“For us, if we had to do that, we would have localized the EQA and the EQB (two of the company’s electric sports utility vehicle models in India) and not localised the EQS, which is the top end of the car," Iyer said.
Both BMW and Mercedes import vehicle parts or so-called completely knocked down units for some of their car models, which are then assembled, or localised, in India, helping reduce freight costs and import duties. The other strategy is to import fully built cars.
Mercedes assembles both its EQS SUV and sedan models in India.
“No strategy is right or wrong," said Iyer.
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