Archive · 13 Nov 2025
Mercedes-Benz India Sees Surge in Diesel Car Sales Post-GST Cut
Even though many car companies worldwide are focusing more on electric cars, Mercedes-Benz in India is seeing a big jump in sales for its diesel cars.
This happened after the government lowered taxes on luxury cars, including diesel ones.
Because of this tax cut, diesel cars now make up 40% of all Mercedes-Benz cars sold in India, up from 29% before.
Customers, especially in places like Gujarat, are choosing diesel more often, even though they cost more upfront than petrol cars.
The company is now facing a shortage of diesel cars because so many people want them!
They are working to make more to reduce the waiting time for buyers.
Mercedes-Benz is also planning to increase prices next year due to rising costs for things like energy and shipping.
Mercedes-Benz India has seen its diesel vehicle sales rise to 40% of total sales, up from 29%, following a 6% GST cut.
The surge in diesel demand is attributed to the GST reduction on luxury vehicles, despite a significant price difference with petrol models.
Gujarat is leading the recovery in demand for diesel vehicles, contributing to the unexpected rise in sales.
Mercedes-Benz India is currently facing a shortage of diesel models due to the high demand and is increasing production.
The company plans price hikes in 2025 and 2026 due to ongoing cost pressures and will launch its new software-defined CLA model in Q1 2026.
- Who
- Mercedes-Benz India, including MD & CEO Santosh Iyer
- What
- Experiencing a surge in diesel car sales, which have increased from 29% to 40% of total sales following a 6% GST cut.
- When
- Since the GST reduction implemented in September, contributing to strong September-October sales.
- Where
- India, with Gujarat leading the recovery in diesel vehicle demand.
- Why
- Due to the 6% GST cut on luxury petrol and diesel vehicles, making diesel cars more attractive despite a price difference of Rs 2 to Rs 2.5 lakh with petrol models.
Global Trend
Indian Market Trend
Vehicle Powertrain Preference
Global Trend
Globally, there is a general shift away from diesel engines towards electric mobility.
Indian Market Trend
In India, Mercedes-Benz is experiencing a significant increase in demand for diesel vehicles, which now account for a larger share of their sales.
- Diesel Sales Share (Post-GST Cut)
- 40% of total sales
- Diesel Sales Share (Pre-GST Cut)
- 29% of total sales
- Reason for Sales Surge
- 6% Goods and Services Tax (GST) cut on luxury vehicles
- Leading Region for Diesel Recovery
- Gujarat
- Current Sales Challenge
- Shortage of diesel cars due to unexpected demand
- Expected Price Increase
- In 2025 and 2026 due to cost pressures
- New Model Launch
- New CLA in Q1 2026
