Maruti Suzuki India Limited, India's largest car maker, has officially declared a price hike by up to Rs. 5,250 in its entire product portfolio with immediate effect. The move will help the auto maker to offset the effect of unfavourable fluctuations in the exchange market and increasing cost of components.
The company's spokesperson said, “The average hike in the price across models is around 1 per cent and the range will be between Rs. 2,500 and Rs. 5,250.”
MSIL's product portfolio has an array of products, comprising from Maruti 800 entry-level hatchback to luxury sedan Kizashi, which both are priced between a bracket of Rs. 2.04 lacs and Rs. 17.5 lacs (prices are ex-showroom Delhi).
On the price hike, the Chief Operating Officer (Marketing and Sales) of MSIL, Mayank Pareek said, “There is a lot of pressure on our margins due to the foreign exchange fluctuation and rising input costs.”
The auto maker believes that in order to compensate the negative movement of currency, it has to reduce its exposure to forex by around 65 per cent, amounting to $ 600 million by March 2015. In light of this, the car maker has been working with its suppliers to reduce the amount of imports. On the other hand, the company is also eyeing new markets to increase its export potential to mitigate the impact of foreign exchange fluctuations.
Not only MSIL has increased the prices of its models as Honda Cars, General Motors and Audi India are also a member of league or in a process to imply the same. With this approach, industry experts believe that the sales volume of several car makers will witness a dip following the price hike; however big players like Maruti Suzuki are expected to continue cashing on their brand value.
