Eyeing on the upcoming festive season, the largest passenger car maker, Maruti Suzuki is planning to hike the prices of its vehicles by Rs. 10000 from the first week of October. Expressing his views on this recent development, Maruti Suzuki's Chief Operating Officer, Mayank Pareek was quoted as saying, "We have been wanting to raise the price for some time as our input costs went up severely, mainly on account of weakening of rupee. However, the market was not conducive. Now it has become inevitable."
Citing high interest rates and depreciating value of rupee as the main reasons Pareek told that it is necessary for the company to hike prices as current situations does not allow more leverage. He further told that the amount of increase will vary depending on the model and its specifications, which shall be effective from the month of October. Commenting on the amount he said "The amount of price hike will vary between Rs. 3,000 and Rs. 10,000. It will be applicable to all our models." It must be noted that the company had last hiked the prices in January 2013 when all its models became costlier by Rs. 20,000.
It seems that major car companies are following in the footsteps of each other as earlier in this month Hyundai and General Motors decided to raise the prices of their cars till Rs. 20000 in order to counter the inflationary pressures. Similarly, Toyota Kirloskar Motor had announced a increase in the prices of its models up to Rs. 24,000 with effect from September 21 in order to counter the higher cost of raw materials and depreciating value of rupee. While for Tata Motors, it hiked the prices of both commercial and passenger cars by 1 per cent to 1.5 per cent depending on the petrol and diesel models.
Over the past few months, Indian economy has been suffering a lot due to the drastic fall in the value of rupee as opposed to US dollar. The value of dollar reached an all time high but the now the situation is gradually coming under control due to the slew of measures taken by Reserve Bank of India. Since the beginning of the year, the demand for passengers cars has been dipped significantly, which in turn has effected the fortunes of numerous car companies in India. Due to the mounting input costs, car makers are compelled to adopt similar plans so as to contain their expenditures. However, it is predicted that the slump in the Indian car market will continue and during the end of financial year 2013, car companies will register a downfall in their sales.
