New Delhi: Car prices are set to increase yet again in the new year, as major car makers have decided to pass on higher input costs to customers.
Hyundai Motor India Ltd and General Motors India Pvt. Ltd (GM India) have decided to increase prices across models by at least 1.5-2.5%. The country’s largest car maker, Maruti Suzuki India Ltd, said it will hike prices of its vehicles soon to offset rising input costs and the strengthening yen.
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“In the past few months, input costs have increased significantly. We have been absorbing so far through internal efficiency measures, but now we have to pass it on to consumers,” Maruti Suzuki India managing executive officer (marketing and sales) Mayank Pareek told PTI. He added that the company is still working on the size of the imminent price increase.
“Input costs have been rising for quite some time. Now, we have decided to increase prices of vehicles by 1.5-2% from January,” said a Hyundai spokesperson.
Toyota Kirloskar Motor Pvt. Ltd will revise the prices in January.
India’s largest vehicle manufacturer, Tata Motors Ltd, is yet to a take decision. “There is a continuous pressure from the supply side. But we haven’t taken a call,” said Tata Motors spokesperson Debasis Ray.
Since January, car makers have increased prices at least four times citing increasing input costs, an increase in excise duty and adoption of new emission norms.
The first round of price hikes happened in January, with car firms citing rising raw material costs. Prices moved up again when finance minister Pranab Mukherjee announced an increase in excise duty in his budget proposals for FY11 in February. In April, prices were revised after auto manufacturers upgraded engines to Bharat Stage (BS) IV in 13 cities and BS III in the rest of the country.
“The prices of key commodities such as steel, rubber and copper have increased. Tyre companies such as Apollo have increased prices in November. So, a price hike was expected,” said Aniket Mhatre of brokerage firm Prabhudas Lilladher Pvt. Ltd.
However, he said it will not have any impact on the sales, with strong income growth in an accelerating economy.
According to data provided by the Society of Indian Automobile Manufacturers (Siam), the industry sold 1.5 million units by October this year against 1.1 million last year.
On Sunday, GM India said it will increase prices of its models by 1.5-2.5% in January.
PTI contributed to this story.