Price of XUV 500 and other vehicles to be increased by Mahindra & Mahindra

Saturday 02 June 2012, 11:16 AM by

Mahindra & Mahindra is all set to raise the price of its commercial and passenger vehicles by 10 to 15 percent. Although the company mainly uses local parts but for some of their vehicles, important raw materials and components are imported from the global market.

Depreciation of rupee is considered as the main reason for the proposed price hike as the manufacturing cost is bound to increase. In order to maintain the profit margin, Mahindra & Mahindra will pass on the extra cost burden to the customers in the form of higher price.

The company is geared up to open the booking of Mahindra XUV500 on June 8, 2012. A 10 percent price hike is expected on this model, which was launched with a starting price tag of Rs. 10.80 lacs (ex-showroom Delhi). The XUV500 received good response from the customer ever since its launch. In only two rounds of bookings, the company sold around 9 months of the production capacity of XUV500. Due to heavy demand, the automobile company increased the production capacity of the vehicle by 4,000 units per month.

Price hike of Mahindra XUV500 will be followed by Xylo, Verito and the Bolero. As per reports, Mahindra is not the only company, which will raise the price of its vehicles due to deprecating rupee value, other automobile companies will also follow the same route. Due to the low demand, Hyundai, the second largest car maker is planning to offer discount on its petrol cars. However, in the current situation, it will be interesting to see how a balance is maintained by the car maker between increasing important cost and rise in fuel prices.