The Stuttgart-based company also blamed rupee for the steep price increase. Mercedes-Benz either imports its cars to India as fully manufactured units or kits that are then assembled here. The weak rupee — the local currency closed at a record low of Rs 70.3 to a dollar on Thursday — has made the imports costlier. While the rupee has depreciated more than 5% against the euro in the last eight months, the local policy interest rate has gone up half a percentage point in a couple of months’ time, Mercedes-Benz said in a press release. As a result, the company said it raised car prices as well as retail finance rates.

Roland Folger, managing director of Mercedes-Benz India, said: “A steady rise in input costs against the backdrop of an unfavourable forex rate and high inflationary cost together have had a significant impact in the recent past. We have been watching this trend cautiously and avoided any price changes in the recent past. Considering the rapid depreciation of the rupee against the major currencies in last few days, we were left with fewer options, but to make some necessary price adjustments…” Other automakers like Honda Motor, Hyundai Motor and Mahindra & Mahindra have increased prices by up to 2% starting August. Mercedes-Benz’s rivals Audi, Jaguar Land Rover and Volvo had hiked prices in April.