Mercedes-Benz India has announced a significant shift in its product strategy, confirming that the upcoming electric CLA sedan will serve as the primary replacement for three current entry-level models: the A-Class, the EQA, and the EQB. This consolidation aims to refocus the brand’s efforts on higher-margin segments while distancing itself from the aggressive discounting prevalent in the entry-level luxury market.
Strategic Shift Toward Value
The decision follows a reported 23 percent decline in Mercedes-Benz’s entry-level segment sales during 2025, a period where competitors like BMW saw growth with the 2 Series and iX1. According to Santosh Iyer, MD and CEO of Mercedes-Benz India, the brand is intentionally avoiding a price war to protect residual values and brand equity. The new strategy will leave the portfolio with just two entry-level options: the upcoming CLA and the existing internal combustion engine (ICE) GLA SUV.
Technology and Platform
The new CLA represents a technological leap for the manufacturer’s entry-tier offerings. Built on a next-generation platform, the vehicle will feature several advanced technical integrations:
- The latest MB.OS (Mercedes-Benz Operating System)
- Advanced AI-driven assistance systems
- High-performance processing powered by Nvidia chips
By utilizing a modern, dedicated architecture, the CLA is intended to offer a more premium experience than the models it replaces, justifying its position as a high-value proposition rather than a volume-focused entry point.
Market Positioning and Pricing
While the current A-Class sedan is positioned between Rs 44.46 lakh and Rs 45.92 lakh, the upcoming CLA is expected to enter the market at approximately Rs 60 lakh (ex-showroom). Although this raises the brand’s entry price significantly, it remains competitive relative to the outgoing EQA and EQB electric SUVs, which are priced between Rs 67.20 lakh and Rs 78.90 lakh. Mercedes-Benz leadership maintains that the CLA’s advanced features and platform will provide sufficient value to offset the premium over the A-Class, prioritizing brand strength over sheer sales volume.
