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Honda to hike prices of cars from August due to rise in input costs

To offset the impact of a sharp increase in the procurement cost of various essential commodities like steel and precious metals the company has decided to increase the prices of vehicles
  • Honda is currently working out the details of the price hike which would be implemented from August
  • With input costs going up, Honda is planning to increase prices of its vehicles.Premium
    With input costs going up, Honda is planning to increase prices of its vehicles.

    Honda is all set to increase the prices of its vehicles from August. The price rise will impact various models in its lineup. Honda blames rising input costs, or the cost incurred by the carmaker to produce each vehicle, as the reason behind its decision, a senior company official told PTI news agency.

    The official said to offset the impact of a sharp increase in the procurement cost of various essential commodities like steel and precious metals the company has decided to increase the prices of vehicles.

    However, the carmaker has not specified the rate of these hikes to be implemented next month.

    The company, which sells various models, including City and Amaze, is currently working on the quantum of the increase it would pass on to customers.

    "The prices for raw materials like steel, aluminum and precious metals have increased sharply and many of them are at an all-time high, impacting our input costs significantly," Honda Cars India Senior VP and Director (Marketing and Sales) Rajesh Goel told PTI.

    The company is currently working out the details of the price hike which would be implemented from August, he added.

    "Our endeavour is to keep the cost of acquisition lower, so we are currently deliberating on how much of the additional cost we can absorb and how much will be inevitable to be passed on to our customers. The revised prices will be implemented from next month," Goel noted. The company had earlier increased prices in April this year.

    However, last month Honda Cars India Ltd (HCIL) said its June sales were better at 4,767 units, up from 2,032 units in May 2021.

    "With the unlocking of many states and reopening of dealer outlets in most markets, we expect car sales to further pick up from this month onwards and will accordingly ramp up our daily production," Goel had said in June.

    Steel prices have gone up considerably in the country over the last few months. In June, leading domestic steelmakers had hiked the prices of Hot Rolled Coil (HRC) and Cold Rolled Coil (CRC) by up to 4,000 and 4,900 per tonne, respectively.

    HRC and CRC are flat steel products used in industries such as auto, appliances and construction. Hence, any rise in steel prices impacts the prices of vehicles, consumer goods, construction costs.

    Besides, the prices of precious metals like rhodium and palladium have almost doubled impacting the production cost. Rhodium and palladium are used in the catalysers and their demand has gone up manifold due to the introduction of stricter emission norms across the world.

    With input costs going up, Maruti Suzuki India (MSI) in June announced that it would increase the prices of its entire product portfolio in the September quarter.

    The auto major has already effected a price increase in April. On April 16, MSI had announced the weighted average price increase of 1.6% in ex-showroom prices of models.

    On January 18 this year, the automaker had announced a price hike of select models by up to 34,000.

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    Updated: 04 Jul 2021, 12:34 PM IST
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