The cascading effect of the rising dollar-rupee exchange rate, up a more than eight percent in the last month, has hit the automobile industry. Luxury car makers are impacted the most and Audi has reacted by raising its prices by approximately four percent already. Mercedes-Benz, however, says it won’t be so quick to transfer the burden of the unfavourable exchange ratio on to customers, and will allow its prices to stay where they are for a bit. “We normally hedge against the dollar and so are okay for now. But we will have to take action if this trend continues,” said Mercedes-Benz India’s MD and CEO Eberhard Kern.
Of course, Mercedes would also have the most to lose by raising its prices – the German luxury brand has only recently been on a new model binge, having just launched the new E-class, the new A-class, the new B-class diesel and the new GL-class, and taking prices up this early in the lives of these models could have a negative effect.
Weakening rupee pushes up luxury car prices