Mercedes-Benz has been India’s No. 1 luxury car brand since 2015, maintaining its lead for more than a decade. However, the sales race has become significantly closer in recent years, with BMW steadily reducing the gap. Interestingly, BMW has already moved ahead of Mercedes-Benz on VAHAN retail registrations in H1 2026.
It is against this backdrop that Mercedes-Benz India MD and CEO Santosh Iyer has questioned the industry’s focus on sales rankings. Speaking in a recent interview with ET Auto, Iyer said Mercedes does not intend to chase volumes simply to retain the No. 1 position.
“Who Is Asking Us To Be Volume No 1?”
When asked about increasing competition in India’s luxury car market and the importance of revenue versus volume leadership, Iyer had a pointed response. “Who is asking us to be volume No 1? Who is asking, except the press, who tries to come up with stories on No 1, No 2, No 3?” Iyer said.
He added that Mercedes-Benz India is not listed in the country and therefore has no compelling reason to chase what he described as a “mirage”. Instead, the focus is on products and customer experience. Iyer also pointed to the changing fortunes of luxury brands over Mercedes’ 32-year presence in India. Mercedes itself was once No. 3, before eventually returning to the top. According to him, volume leadership should be an outcome of the company’s strategy rather than the objective itself.
BMW Has Reduced Mercedes’ Lead
The timing of these comments is interesting because Mercedes is facing its closest sales battle with BMW since taking the No. 1 position in 2015 (when they overtook Audi India). Mercedes sold 13,502 cars in 2015 compared to BMW India’s 6,550 units, giving it a substantial lead of 6,952 units. The gap remained above 5,000 units through 2018 and stood at 4,786 units in 2019.
Mercedes continued to maintain a sizeable advantage after the pandemic. The difference stood at 4,554 units in 2022, 4,105 units in 2023 and 4,553 units in 2024. That changed considerably in 2025. Mercedes sales declined marginally to 19,007 units, while BMW increased sales to 17,271 units. Mercedes’ advantage consequently dropped to just 1,736 units, the lowest full-year gap since it became India’s luxury car market leader.
BMW Steps Up India Product Offensive
BMW is also entering the last quarter of 2026 with an expanded portfolio. Long-wheelbase cars, SUVs and EVs have emerged as important growth areas for the company. Recent additions include X1 Long Wheelbase and locally produced i5 Long Wheelbase. BMW has also introduced new 7 Series and i7, strengthening its offering at the top end of the market.
These launches add to a portfolio that has already helped BMW register strong growth in India. They could provide further momentum during H2 2026 as the company attempts to close the remaining gap with Mercedes on company-reported sales as well.
The rivalry also has a wider global context. BMW overtook Mercedes-Benz in global premium car sales in 2021 and has remained ahead since then. The Indian market, however, has continued to favour Mercedes on company-reported annual volumes, making the narrowing gap particularly significant.
Mercedes Doesn’t Want Discount-Led Volumes
Despite the increasing competition, Mercedes does not appear willing to enter a price war simply to protect its No. 1 position. Iyer said increasing sales through discounts is relatively straightforward, but questioned what aggressive discounting would mean for existing customers and the residual values of cars already sold.
“Today, it’s very easy to sell. If you start discounting, you can sell more,” Iyer said. He then questioned what happens to a customer who bought the same car only three months earlier. Mercedes instead wants to protect residual values and maintain pricing discipline. Iyer also said that discounts under the company’s Retail of the Future model are standardised, reducing differences based on individual customer negotiations.
Iyer also stressed that volume alone does not provide the complete picture. According to him, Mercedes remains significantly ahead when revenue is considered because of its product mix and customer profile. “On the revenue side, there is no comparison at all. We are far ahead,” Iyer said.
