As the rupee continues to weaken incessantly, giving facepalms now and then, the auto companies such as General Motors India and Toyota Kirloskar Motor are planning to raise the prices to fight-off exorbitant cost of imported components.
"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," General Motors India Vice-President P. Balendran told the reporters.
He further said that the commodity prices are crossing the limits, which adds more pressure on auto firms. "We are currently evaluating the quantum of impact on the prices of our products," Balendran said.
Echoing Balendran, Toyota Kirloskar Motor Deputy Managing Director, Marketing, Sandeep Singh said the inconsistent behaviour worn by the currency is giving huge blows to the company. "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," he added.
On being questioned regarding the plans to hike the prices, Singh said: "As of now we are absorbing, but if there is too much pressure, then we will share the burden with customers. Currently, we are revisiting the prices of all our models. Any new price increase, if we take, will be applicable from January 1."
The rupee de-energised to an unprecedented low of Rs. 52.50 against the U.S. dollar in the forex market. The discouraging trend has taken its toll on the companies which import considerable quantity of components from overseas.
"The rupee depreciation is adversely impacting us as we are a net importer. This is the worst movement of rupee against US dollar. It has lost 15 per cent in the last two months," Maruti Suzuki India (MSI) Chief Financial Officer Ajay Seth said.
MSIL deals, both directly and indirectly, with foreign currencies while importing components worth Rs. 8,000 crore annually, he added. "At the same time, we also export cars and that is benefiting at present. However, considering both, we are impacted as a net importer. The situation is affecting our margins," Seth said. However, any move to increase the prices of its products in the coming time does not seem to be on the cards.
Thus, the automakers are currently facing a jinx, with the deteriorating value of rupee and the falling demand for cars in the market staring at them constantly.
