Premium car brands – including Mercedes-Benz, BMW and Audi – are announcing increases to car prices in India and citing increased costs as the cause.

Mercedes-Benz said that it will increase its vehicle prices in India by between 1% and 3% from January 14 to counter higher costs.

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The company cited rising input costs, the volatility of the rupee-euro exchange rate and high interest rates as factors that have added to cost pressures. 

Mercedes-Benz India said it will increase the price of its B-Class hatchback by 1.0%, C-Class and E-Class sedans by 1.5% each and its S-Class sedan by 3.0%.

Audi said last week said it would increase the prices of all its vehicle models in India and BMW India has announced a price hike across its entire range of cars in the country, including the Mini brand. The BMW price increases are 5-6%.

Eberhard Kern, managing director and CEO, Mercedes-Benz India said: “Significant level of cost escalations have been absorbed by us till now, but beyond a point we cannot continue to sustain such levels. We have made substantial investment in our India operations and are responsible for the growth of our employees and dealer partners. We aim for a sustainable profitable growth maintaining our premium appeal and hence, we are going to substantially increase the prices of all Mercedes-Benz cars from January 2013.”

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Mercedes-Benz India’s production facility in Chakan, Pune, operates two shifts capable of producing 10,000 units annually and locally produces the C-Class, E-Class, S-Class sedans and started the local production of M-Class from October 2012. Mercedes-Benz India also started the operations of its technologically advanced paint shop from October, which has a capacity of 20,000 units per annum.