General Motors and Toyota mull car price hike as depreciating rupee shrink margins

Wednesday 23 November 2011, 11:57 AM by Vikas Yogi

With a sharp depreciation in the value of rupee, the leading automakers including General Motors and Toyota are mulling over the option of hiking the price of their India portfolio cars. The move would be taken in a bid to offset the increased cost of imported components.

Commenting on the matter to the reporters, General Motors India Vice-President P Balendran said, "We import lots of parts and the rupee depreciation is impacting us. We were planning to review prices in January but due to the currency fluctuation we may have to do it soon." While further elaborating the impact of rising commodity prices, Mr. Balendran said, "We are currently evaluating the quantum of impact on the prices of our products."

On the other hand, while expressing the similar concerns, Toyota Kirloskar Motors, Deputy Managing Director (Marketing) Sandeep Singh said, "It is a double whammy for us. On one hand, yen is appreciating, while on the other hand rupee is depreciating. Our margins are getting impacted."

Due to the sustained demand for the foreign currency, the value of rupee plunged to its all time low Rs 52.50 against US Dollar on the Interbank Foreign Exchange. The depreciating rupee has caused a major shrink in the margins of companies who are dependent of import of a substantial amount of components.