Rise in the cost of inputs and unfavourable fluctuations in the value of rupee has forced luxury car maker BMW to increase the price of its cars. If reports are to be believed, expensive imports also had a role to play in this decision of the Germany-based automobile giant. In an official announcement, the BMW Group confirmed that prices of BMW and MINI brands will be raised by 5 per cent from 15th of August.
Notably, BMW Group is not the only firm that has raised prices of its cars. Another indigenous auto maker, Audi, also increased rates of its Indian portfolio across the country by 4 per cent. As a result, the Q5 luxury Sports Utility Vehicle (SUV) now cost Rs. 1.52 lakh more and the price of A6 sedan has been increased by Rs. 1.8 lakh. Apart from this, the top-end model Audi R8 is now costlier by Rs. 4.42 lakh. While BMW and Audi have already raised prices, Mercedes-Benz is still trying to sustain the current rates in order to keep its recently gained momentum going. However, sources close to the development process stated that Mercedes-Benz is also not too far from raising the prices of its models if the current condition persists.
In comparison to other auto makers, the firms in the luxury car segment have felt the impact of slowdown to a lower degree. According to reports, the players in mass segment have witnessed a decline of 5 per cent in sales, which is likely to get worse in the months to come.
Michael Perschke, the Head of Audi India, spoke in detail about the current scenario and the measures taken by the firm to tackle it. "Market conditions are challenging, but luxury segment has seen some propelled demand due to fresh launches. A depreciating rupee and the rise in input costs have made increase the prices of the entire range, though we are offering customised and innovative finance options from Audi Finance to make the purchase more attractive for our customers," he said.
Apart from Perschke, Eberhard Kern, the Managing Director and Chief Executive Officer of Mercedes-Benz also voiced his concern about the same issue. In a recent event, he was quoted saying, "The weakening of the rupee is a concern and we have been monitoring the situation closely. However, we have not yet decided on a timeline or a quantum for increasing the prices, but it looks inevitable." While Audi and Mercedes-Benz are strongly endorsing a hike in the prices of their cars, their competitors are slightly indecisive about the level of increase. Sources say that these companies are also being affected by the rupee devaluation, but are not yet definitive on raising the prices.
Ashish Chordia, the Chairman of Shreyans Group, the official importer in India for vehicles like Ducati, Maserati and Ferrari, commented on the same issue. "All brands we represent have an annual increase in prices which is implemented by the factory and is a global hike. Rarely do we see market specific price hike owing to local economic trends or currency fluctuation," he said.
