A new car this new year is going to be a costlier deal as automakers gear up for a price hike after tepid sales and heavy discounts eroded profit margins, leaving no room to accommodate the surge in input costs.
Maruti Suzuki, Mahindra & Mahindra (M&M), Ford India, Toyota Kirloskar Motor (TKM), Mercedes Benz and Audi India plan to raise the prices from January 2020. The carmakers told ET that the price hike has been planned to counter the inflationary pressures.
The country’s largest carmaker Maruti Suzuki said the production cost has shot up because of the increase in raw material prices.
“It has become imperative for the company to pass on some impact of the additional cost to customers through a price increase across various models from January 2020,” MSIL said in a statement. The price hike will vary across models. Maruti’s fleet starts from the entry-level small car Alto and goes up to premium multi-purpose vehicle XL6, priced between Rs 2.89 and Rs 11.47 lakh (ex-showroom, Delhi).
While a Ford India spokesperson said that the company plans a 1-3% increase in the prices from January, others like Mahindra & Mahindra (M&M), Toyota India and Hero MotoCorp are also expected to revise the prices, though the quantum of the hike is yet to be decided.
“We are contemplating a price hike in early January. However, a final decision will be taken closer to the end of the month,” confirmed a spokesperson for Mahindra & Mahindra (M&M).
N Raja, deputy managing director at Toyota Kirloskar Motor, said: “The company is reviewing two price hikes, first from January 2020 after evaluating costs through the last six months and the second one on account of transitioning from BS-IV to BS-VI.”
Honda Cars India, however, does not plan to raise the prices from January and will, instead, introduce BS-VI vehicles sequentially and these will come with relevant price increases on account of enhanced emission technology.
“We do not have a price increase plan from January. As we sequentially introduce BS-VI versions of our products, the relevant BS-VI prices will be applicable and the ongoing offers available on BS-IV versions might not be extended to BS-VI versions”, said Rajesh Goel, senior vice-president, and director (marketing and sales).
In the luxury vehicle segment, too, market leader Mercedes Benz said a price increase will be necessary to keep the financials healthy. Its compatriot, Audi India, also is looking to raise the prices by 1% next month onwards, sources said.
News Source: Economic Times, Url: https://bit.ly/2P3y7b1