Mahindra hikes vehicle prices by up to 2%

Mahindra hikes vehicle prices by up to 2%

New Delhi: Auto major Mahindra & Mahindra on Monday said it raised prices by up to 2%for its entire range of products in August to offset the impact of high raw material rates.

“Margins have been a concern as raw material prices were going up in the past. We hope that it will come down in the future... We raised the prices last by 1.5-2%," Mahindra & Mahindra (M&M) senior vice-president (Marketing - Automotive Sector) Vivek Nayer told reporters here.

The company undertook price revision of various products across all categories, he added.

This is the third price hike taken by the company in 2011. Earlier, in January this year M&M had raised vehicle prices by about 1.5%, followed by another upward revision of 1.5-2% in April.

The company sells utility vehicles like ‘Scorpio´ and ‘Bolero´ along with three-wheeler commercial vehicles. It also manufactures and sells sedan ‘Verito´.

When asked about sales, Nayer said: “July and August have been very good. Now we are hoping better sales in September and October on account of the festive season."

He, however, said the company is observing the movement of interest rates on auto loans “cautiously" as it can have an adverse impact on customer demand.

In the domestic market, M&M registered a rise of 31.09% at 35,756 units in August compared to the year-ago period. In July, it had witnessed a jump of 41.90% at 37,323 units over the same period in 2010.

“All our products are doing very well. Our core products as well as new additions have done well," Nayer said.

Products like ‘Scorpio´ and ‘Verito´ are helping the company to register robust growth in the recent past, he said.

Asked whether the company will introduce a new version of Verito in the sub-four metre length category, Nayer said: “It is under consideration. To avail lower taxation, this change is being considered."

He, however, declined to share further details such as a possible time of launching the new variant of car.

In April 2011, M&M had renamed the ‘Logan´ sedan as ‘Verito´, thus completely dropping the erstwhile French partner Renault’s badge from the entry level sedan.

Earlier in April last year, M&M and Renault had agreed to part ways from their joint venture , Mahindra Renault Pvt Ltd , that was formed in 2005 to produce and sell the ‘Logan´ in India as the car had failed to meet expectations. M&M had agreed to buy out Renault’s 49% stake in the JV for an undisclosed sum.

The French auto major, however, agreed to continue to support M&M and ‘Logan´ through a licence agreement and supply key components, including the engine and transmission.