Santosh Iyer, MD and CEO of Mercedes-Benz India, said the Indian luxury-car market is expanding through a shift toward higher-priced models [1].

This trend signals a deepening of "premiumisation" in the Indian automotive sector, where wealthy consumers are increasingly opting for top-tier luxury over entry-level premium options. However, the transition to sustainable energy remains uneven due to systemic infrastructure gaps.

Iyer said the market is seeing a significant move toward high-value vehicles. Specifically, 28% of Mercedes-Benz India sales now come from cars priced above ₹1.4 crore [2]. This growth persists even as the broader market navigates the tension between traditional combustion engines and new electric powertrains.

Despite the rise in luxury spending, EV adoption has been slower than anticipated. Iyer said this lag is due to inadequate charging infrastructure across the country [1]. To bridge this gap, the company is evaluating its product strategy. While Iyer said the lack of product options is holding back hybrid demand [3], he also said the company is open to expanding plug-in hybrids to more models [4].

Regarding fuel standards, Iyer addressed the transition to ethanol blends. He said cars sold since 2020 are fully compatible with E20 fuel [1]. This compatibility is critical as India pushes for higher ethanol blending to reduce carbon emissions and oil imports.

While SUVs dominate the current landscape, sedans continue to maintain a presence in the high-end segment. Approximately 30% of luxury vehicles in India are sedans [5]. This suggests that while the SUV wave is strong, a core segment of the luxury market still prefers the traditional sedan profile.

Iyer's comments highlight a duality in the current market: a strong appetite for prestige and high-cost assets, countered by a pragmatic hesitation to adopt fully electric vehicles until the supporting infrastructure matures [1].

“"Cars sold since 2020 are fully compatible with E20 fuel."”

The shift toward ultra-luxury vehicles indicates that India's high-net-worth demographic is less sensitive to price increases than the general market. However, the reliance on hybrids and E20-compatible engines over pure EVs suggests that the 'range anxiety' caused by poor charging infrastructure is a significant hurdle that luxury brands cannot solve alone; it requires state-level infrastructure investment to accelerate the green transition.