A few days back, it was announced that Mercedes-Benz, Audi and BMW were going to hike prices from January. Now, it has been officially declared that the top two brands in the passenger car segment, Hyundai and Maruti Suzuki, are going to join this bandwagon as well. Notably, these firms have had a reasonable 2013 as far as sales are concerned. However, Maruti Suzuki, India's largest passenger car manufacturer, reported fall in sales, something that surprised everyone including experts and the media.
Mayank Pareek, Chief Operating Officer for Marketing and Sales at Maruti Suzuki, spoke about this. “Maruti Suzuki will increase prices from January 2014 as input costs have been going up and we cannot continue to absorb all of it. We will pass on some part of it to the customers,” he was quoted as saying. At present, the Suzuki owned firm sells vehicles that fall within a price range of Rs. 2.13 lakh – Rs. 24.6 lakh (ex-showroom, New Delhi). This firm produces some of the most best selling models in the market, such as Alto 800, Swift, WagonR and Swift DZire.
Hyundai, which sells cars starting at an ex-showroom price of Rs. 2.89 lakh, is also going to hike prices of its entire product range. Speaking about the same, Rakesh Srivastava, Hyundai Motor India Limited, said, “We will be increasing the prices from January due to the rising input costs and current market conditions.” Apart from Hyundai and Maruti Suzuki, Japanese car maker Honda, according to sources, has decided to raise the cost of its cars in order to negate effect of rise in input cost.
The effect of the economic crisis has taken its toll on companies in the Indian car market. When recent reports were released, many companies recorded fall in sales as compared to the corresponding period last year. There are many reasons why these figures have come into existence. In the first place, country wide inflation has led to rise in fuel prices, thereby increasing the running cost of a car and subsequently, customers' reluctance. Secondly, demand in the Indian market has been pretty sluggish and firms have failed to attract buyers. Apart from this, the constant fall in the value of Rupee with respect to Dollar has directly raised the level of input cost. In order to compensate for this, companies in the Indian car market have decided to go for a price hike across their car line-ups.
