Mercedes to postpone launches over supply issues

Mercedes-Benz India plans to push back the launch of new car models to the second half of 2023 owing to supply chain issues, a top company executive told ET.

The carmaker has also decided to increase prices across models by up to 5% (₹2-12 lakh) from April 1, which managing director Santosh Iyer said was due to an increase in logistic cost, weakening of the rupee against the euro, and upcoming regulations. The company had increased prices in January too.

Delaying the launches will help the German automaker deliver cars faster and keep the backlog of pending orders in check, Iyer told ET. In India, the carmaker has a backlog of 4,000-4,500 cars. "We are committed to launching 10 new cars this year - half of them are TEV (top-end vehicles). Apart from the one model - the AMG E 53 4Matic+ Cabriolet - that we launched in January, we will postpone the majority to Q2 and more towards Q3 and Q4," said Iyer, who is also the CEO. By then the company expects supply chain issues pertaining to some plastic parts and aggregates to be sorted.

To expedite production and deliver faster, Mercedes has been airlifting some of these parts, a move that has pushed up its overall logistics cost, said Iyer.

Prices have been hiked by ₹2 lakh for the A-Class limousine and GLA SUV, ₹7 lakh for the S 350d limousine, and ₹12 lakh for the Mercedes Maybach S 580 luxury limousine.

"We have limited options, given the way the euro has moved and input costs have risen," said Iyer. "To maintain profitable growth, we had to do this."