Experts of Indian auto industry has come up with a study that individuals will need to shelve out more for cars as the value of Rupee has significantly crashed against the US Dollar. Reportedly, the fall in Rupee's value has raised the cost of auto ancillary companies, forcing them to increase the prices across products. Interestingly, the hike in prices will come at a time when the rate of interest is already low. It must be noted that the auto industry is already fearing that a new round of price increase will further hit the already down sales.
The fall in the value of Rupee against US Dollar is currently at an all time low of Rs. 58.17, which has raised the prices of input. Speaking on the same lines, the established German auto makers, Mercedes-Benz and Audi commented that the depreciation in Rupee is making the situations difficult for the auto makers to stabilise the retail prices of products.
The Managing Director and Chief Executive Officer of Mercedes-Benz India, Eberhard Kern was quoted as saying, “The weakening rupee and volatility of the same has put a severe strain, and continues to be a concern for Mercedes-Benz India. We are studying the developments very closely, and if this trend continues, moving forward, we may need to reconsider price re-positioning for specific models.” However, he later added that the three pointed star has not yet worked out any plan for increasing the prices of its models.
Senior officials at Audi also mentioned that the price hike in its entire Indian product portfolio can take place any time soon. The pressure of increased prices of inputs has impacted the costing of the Audi India significantly. According to them, the auto maker is left with no option but to increase the prices to offset the devaluation of Rupee. On this, industry experts said that even a hike of 1 per cent on models like A4 sedan and Q3 Sports Utility Vehicle (SUV) will increase the overall prices of the model by almost Rs. 25,000.
A thing to note here is that the mainline car companies are also badly hit by the fall in the value of Rupee as a large number of components used in the production of cars are imported. On this, the Director (Marketing and Sales) at Renault India, Sumit Sawhney said, “Forex is nearly playing havoc, and we are evaluating the situation. Parallel to this, Honda Cars India, which has recently increased the prices of its CR-V utility vehicle and Amaze sedan, said that the depreciation in Rupee is alarming. But, the Japanese auto maker has not framed any immediate plans to announce another price hike as of now.
