New Year may not be a great time to drive in a new car home. Maruti Suzuki, Hyundai, Toyota Kirloskar and General Motors have all announced a price hike of up to 3% from January to offset the rise in input costs because of adverse foreign exchange movement. Among other players, Volkswagen and Honda have said that they will make similar announcements very soon.
Market leader Maruti will increase prices by a maximum of R20,000 across its model range that includes seven small cars, while Toyota Kirloskar has announced a hike of up to 1 to 2%. General Motors? increase will be higher at 1-3%.
?We will increase product prices in January 2013 across all car lines ranging from 1 to 3% depending upon models owing to currency fluctuation and hike in input costs,? said P Balendran, VP at GM India.
Hyundai Motor India?s Rakesh Srivastava, vice-president for marketing, said that a range of increase is being worked out. Jnaneswar Sen, senior vice-president (sales & marketing), at Honda Cars India, said, ?We have decided to increase prices from January, but have started work on the quantum of increase.?
The price increase has come about because profit margins in the auto industry have been under the pressure as the cost of imported content such as key components and steel have recently become expensive with the sliding rupee and appreciating Yen. Companies have also not been able to offset the higher costs through increased scale as sales have been low in the October-November period.
In fact, Maruti suffered a hit of R350 crore during the July-September, FY13 quarter due to adverse forex movement. In the quarter, it posted a 5.41% fall in net profits to R227.45 crore.
