As currency fluctuation and rising commodity costs put pressure on profit margins, nearly all carmakers such as Maruti Suzuki, Ford, General Motors (GM) and Hyundai have announced price increases from January.
While GM and Hyundai plan to increase prices by up to two per cent, Ford will increase model prices by a maximum of three per cent. Toyota Kirloskar had also recently said that it would up car prices by up to three per cent.
Pressure on margins
“With the Yen appreciation and weakening of the rupee, there is huge pressure on margins and there will surely be a correction.
“There will be a price increase in the first week, but we're working on how much it would be. It should be in the range of two per cent,” a senior Maruti official said.
GM, which sells cars under the Chevrolet brand, will increase prices for the diesel variant of the Beat hatchback by Rs 15,000, since the current pricing was on an introductory basis after its launch in July this year.
“We are increasing prices in the range of 1-2 per cent.
“The price increase has been evaluated on the basis of various factors such as currency fluctuation, higher commodity prices and a rise in transportation costs,” said Mr P. Balendran, Vice-President, GM India.
Diesel pricing policy
He added that the industry has asked the Government to spell out a clear pricing policy on diesel fuel, so that investments can be made with more surety. At present, diesel makes up for 80 per cent of demand in car models, wherever such a variant is available.
Hyundai cited similar reasons as well. “All these factors have now made it very difficult for us to absorb the rising costs.
“We are in the process of working out the specific increase on the various models. Broadly, the increase will be 1.5-2 per cent across all models,” said Mr Arvind Saxena, Director of Marketing and Sales, Hyundai Motor India.