Maruti, Toyota, GM to raise prices from Jan

Tags: News

Hyundai, Volkswagen, Honda too mull hike

Carmakers have signalled intent to increase prices from next year citing pressures on margins due to currency fluctuations and increase in input costs. While Maruti, Toyota and General Motors have confirmed the hike levels, other companies are evaluating the quantum of price increase.

Maruti Suzuki would increase prices by up to Rs 20,000 across all the range from January 1. Mayank Pareek, chief operating officer — sales and marketing, MSIL told Financial Chronicle that adverse impact of foreign exchange on its cost of manufacturing has led to the decision.

Maruti’s November volumes continued to hold its monthly levels of over one lakh units (both domestic and exports), thanks to continued traction in diesel sales and the launch of the new Alto (over 40,000 bookings so far).

“It is unlikely that only few manufacturers will increase prices. The segment leaders normally set the pace and the others would largely use that as the opportunity to correct their prices. While the low cost or entry-level products are substantially localised, the assembly and CBU models will be impacted more,” Kumar Kandaswami, senior director, Deloitte India told Financial Chronicle.

Toyota Kirloskar Motor will be effecting a price hike of 1-2 per cent across all models from January 1. The company has been importing parts for Innova and Fortuner from Thailand, while components for Etios models are imported from Japan.

General Motors too has indicated that it will effect price increase across models from January. “We will increase product prices across all carlines ranging from 1 to 3 per cent depending upon models owing to currency fluctuation and hike in input costs,” said P Balendran, vice-president, General Motors India.

Meanwhile, other carmakers, including Hyundai are also contemplating increasing the prices of their models. “Macro economic conditions have not been favourable this year for volume growth. There is pressure on margins on account of low volume growth and increase in various costs. We are considering a price increase, the quantum and timing will be communicated once we finalise the details,” Rakesh Srivastava, vice-president (sales and marketing), Hyundai Motor India told Financial Chronicle.

Sahil Kedia, industrial analyst, India Equity Research of Barclays pointed out that the auto market was witnessing lower discounts or price increases post-festive season. “We note that in general, there is a reduction in the level of dealer discounts with minor price increases (1-3 per cent) across most products and companies. We view this as a positive for the industry,” he added.

Agency reports indicate Volkswagen and Honda are also evaluating price increases. While adverse market conditions continue to affect demand for passenger cars in the country, carmakers hope to see some demand due to year ending sales.

balachandarg@mydigitalfc.com

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