The move comes after the company’s sales in the country exceeding 19,500 vehicles. Credit: Tada Images/Shutterstock.

Mercedes-Benz is set to broaden its reach in India by opening an additional 20 dealerships or service outlets in 2025, focusing on smaller cities, Reuters reported.  

The German automaker, which currently operates 125 outlets in India, is shifting its focus from metropolitan hubs like New Delhi and Mumbai to towns where demand for high-end and electric vehicles surpasses that for entry-level models.

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In Indian cities such as Kanpur and Patna, Mercedes has observed a higher demand for its premium and electric vehicles.

To cater to this demand, Mercedes intends to establish service centres in these areas as an initial step towards expansion, according to the news agency.

This move comes after the company’s sales in the country exceeding 19,500 vehicles, which was a 12% increase from the previous year.

The growth in Mercedes’ Indian market is predominantly driven by top-tier cars, with prices upwards of $175,000, now constituting about a quarter of its sales in the country.

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Consequently, the average selling price of a Mercedes car in India has risen to approximately $110,600 in 2024, up from the previous year.

Mercedes-Benz India CEO Santosh Iyer was quoted by the news agency as saying: “Now the second and third generation have taken over the family business and these guys have studied abroad, come back and are able to consume without guilt.

“It is not only cars, but even watches and other luxury. Top-end cars continue to grow and outgrow entry and core segments also. These are promising signs on the changing structure of the market.”

Iyer explained that Mercedes has seen stronger EV sales in smaller cities, where stand-alone homes offer more charging space than condominiums.

In January last year, Mercedes-Benz announced that it will invest $24m in its Indian business.