Hyundai Motor India Limited (HMIL), the country's largest exporter of passenger vehicles, revealed intentions to hike the prices of all cars under its Indian portfolio on October 10, 2012. The Korean auto manufacturer cited the rising cost of raw materials and the never ending fluctuations in the value of Indian National Rupee (INR) being the critical reasons towards its decision. The hike is expected any time during the upcoming two weeks but the company refused to divulge information regarding the fraction of increase in the retail values of its products.
Expressing his opinion on the upcoming price hike by the company, Rakesh Srivastava, Vice President (VP), National Sales and Marketing, HMIL said, “The price increase has been necessitated by a variety of cost push factors like increase in raw material prices and freight increase. We have tried to minimise the hike so as to cause less inconvenience to our valued customers.”
The latest decision by HMIL reeks more of a peer pressure rather than a desperation fuelled move. Evidently, the July-September month had been very depressing for Hyundai Motors and the car maker recorded its worst ever sales drop in the September 2012. The recent market gloom and the plunging sales in the Indian passenger car market posed immense burden on most of the automobile operators, who were left with no option but to hike the prices, in order to offset the piling losses.
Maruti Suzuki India Limited (MSIL), the country's favourite car maker and the most stiff competitor of HMIL, increased the prices of all its models by 1 per cent in the first week of October 2012, while the American auto maker General Motors also upped the prices of its Indian fleet by Rs. 8,000 to Rs. 20,000. Further, Honda Cars India followed the league and increased the retail prices of its three products, namely the Brio and Jazz hatchbacks along with the much popular City sedan by up to 2.6 per cent, starting from October 1, 2012.
HMIL's Indian fleet comprises hatchbacks, sedans, Sports Utility Vehicles (SUV) that are available within the price bracket around Rs. 2.7 lacs and Rs. 25 lacs. Hence, the Indian lovers of Hyundai products will be closely watching the proceedings and since, the festival season is just round the corner, a price hike could adversely affect the purchasing capacities of domestic consumers.
