Luxury car buyers lose most GST 2.0 benefits as Mercedes, BMW and Audi raise prices
The tax rate cut had initially led automakers to drop vehicle prices who have since gone on to raise rates as the rupee fell sharply against major currencies, especially the dollar and euro, making imported parts pricier.
Cars priced above ₹50 lakh, which account for around 1 per cent of India's total car sales, are estimated to have grown 11.2-11.5 per cent in the first nine months of 2026.
Regular price hikes by luxury carmakers Mercedes-Benz, BMW and Audi to offset higher costs have eroded most of the gains of a cut in goods and services tax (GST). The tax rate cut had initially led automakers to drop vehicle prices who have since gone on to raise rates as the rupee fell sharply against major currencies, especially the dollar and euro, making imported parts pricier. Automakers are also facing rising costs of other inputs. Advt
Luxury car sales are forecast to grow 11 per cent to around 58,000 units in 2026. While the performance looks like a strong rebound from a 2 per cent decline last year, the projected growth rate trails the broader Indian passenger vehicle market which is expected to advance 13-14 per cent this calendar year. The latter has already expanded nearly 20 per cent in the first nine months, according to Mobility Global, an automotive forecasting and analytics firm. 5 per cent in the first nine months of 2026.
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