Come January, Mahindra & Mahindra’s (M&M) most popular premium SUV - XUV500 will cost

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around Rs 30,000-40,000 more. Popular M&M models Xylo, Scorpio and Bolero among others will also see their cost increase by up to three per cent, though he carmaker hasn’t specified the exact price hikes for these.

Two officials in the know, said the prices announced by M&M during its launch in October 2011 were introductory price. “So from January 1, the prices of XUV500 will go up by Rs 30,000, depending on the variant,” the official added. XUV500 was priced between Rs 10.73-12.81 lakh ex-showroom Mumbai earlier. M&M had received 8,000 bookings soon after its launch in September this year and had to stop taking bookings from October 12. The company will be starting bookings from January 2012.

When contacted a M&M spokesperson declined to specify the fresh prices for the XUV500. “Model-wise price hike in terms of percentage has not yet been finalised,” he said.

Pawan Goenka, president – automotive and farm equipment, M&M had earlier said that the company would be increasing production of XUV500 to 3,000 per month beginning January 2012 and increase it further to 4,000 units per month by June, from 2,500 per cent month at present.

“This price rise has been necessitated by the rising input costs over the last few months,” M&M said in a press release. “We also plan to hike prices for a range of tractors and commercial vehicles from January,” a senior company official said.

Carmakers such as Toyota Kirloskar, Hyundai, Ford, General Motors and Renault have announced price hikes up to three per cent from January.

While individuals face higher prices for cars, credit rating agency ICRA said firms might defer capacity hikes keeping in mind forecast demand. “Given the current environment where the growth in industrial activity is at a two year low and the operating environment for fleet operators is gradually weakening, we expect the industry to defer capacity addition,” ICRA, said in a report. The agency forecasts a subdued near term outlook and a slowdown in new vehicle sales. “Among segments, medium and heavy commercial vehicles (M&HCV), which tend to be more influenced by the macro-economic indicators is likely to register a weaker performance over the near term against the steadily growing light commercial vehicles (LCV) segment,” added the report.