It is a commonly known fact that depreciating value of the Indian Rupee, fluctuating fuel prices, weak consumer sentiments and inflating economy have taken a toll on the Indian auto industry. As companies battle rising costs and low sales volumes to maintain their bottom lines, hiking the prices of some models was a certainty. Therefore, in an unsurprising move, Ford India increased the cost of all cars in its line up by 3 per cent. This decision was taken after the manufacturer could not ward off the threat from increasing input costs and decreasing value of Rupee.
According to Nigel Wark, Executive Director, Marketing, Sales and Service, Ford India, the car maker had been bearing the brunt of increasing costs for the past three months. However, as the situation continues to worsen, the company was forced to increase the prices of its vehicles from next year. So, buyers who were looking to buy Ford cars should be prepared to shell out a few extra bucks from next year. Currently, the company offers a hatchback, Figo, two sedans, Fiesta Classic and All-New Fiesta, and a Sports Utility Vehicle (SUV), Endeavour, in the domestic market.
While market standing of car makers working in India is already weakening due to rising car prices, the strengthening Yen has made imports more expensive for them. Rising costs of imports have also been a cause of worry for auto manufacturers, which have now begun focussing on localisation to secure their future.
A short while ago on the same day, Hyundai Motors also dealt a blow to buyers by announcing that it will hike the prices of its car in India by 1.5 per cent to 2 per cent. This increase in price will also be applicable from January 2012 onwards and the new price list will also be released the same month. Even as potential customers were reeling from this news, they had to face another rise, announced by General Motors this time, which said that buyers will have to spend an extra 1-2 per cent for its cars from January.
Toyota Kirloskar is all set to raise prices too, which may be as steep as Rs. 50000 for its Fortuner, a premium SUV. Maruti Suzuki India Limited, the largest car manufacturer of the country, is also expected to increase car prices by Rs. 2000-10000 in India in January 2012. Honda Siel, the Japanese giant, has insulated itself from this rise through its forward contracts, thus gaining a much-needed edge in the current scenario.
This impending increase will usher in 2012 on a bad note and has already become the bane of 2011, when auto companies raised prices four times.
