At a time when rising fuel prices and high interest rates have marred the demand for passenger cars, Tata Motors has decided to hike the prices across all its all ranges. The announcement came soon after various other car maker decided to increase the prices of their cars citing increasing expenditure as the main reason. Tata Motors, the country's largest auto maker in terms of revenue is looking forward to increase the price of passenger as well as commercial vehicles by 1.5 per cent.
Commenting on the development, a company official told that due to the higher cost inputs and mounting expenditures, a hike in prices was substantially needed. He further added "Tata Motors plans to increase the prices of its passenger and commercial vehicles around 1-1.5 per cent, depending on the model, either petrol or diesel. This is due to rise in input costs, and after having neutralised to the extent possible through internal efficiencies.”
Industry experts believe that this move from Tata Motors was expected as other major auto makers also announced similar plans and from now on, the trend of rising prices will be almost all the companies. Experts also believe that besides the reasons given by the car companies, another major contributor to the marginal rise in prices has been the upcoming festive season. As the sales of passenger cars generally see a spurt during the festivity period, a number of car companies might be banking on this time in order to generate considerable revenues.
In the meanwhile, the country's second largest passenger car maker, Hyundai also said it will hike prices of vehicles across all segments. The company told that from 1st of October 2013, buyers will need to shell out Rs. 4000 to Rs. 20000 more on most of the models with the sole exception being of Grand i10. After making this announcement, the a company spokesperson said that the depreciating value of rupee and inflation has in turn impacted the input costs. All this means is that the range of vehicles that starts from the entry level hatchback Eon to high-end Sports Utility Vehicle (SUV) Santa Fe will become more expensive.
Following in the footsteps of Hyundai, General Motors too increased the prices of its vehicles from Rs. 2000 to Rs. 10000 for the fourth time in the current year. It said that a round up figure of 1.5 per cent will be considered for hiking the prices across all its models.
It must be noted that the Indian wing of General Motors had recently increased the prices of Beat, SAIL and Enjoy by Rs. 10000. It must be noted that the demand for passengers cars has been registering a negative impact since the beginning of 2013. It has impacted the fortunes of major car companies in India, which are now striving hard to contain the rising expenditures. Owing to the inflationary pressures, car makers are compelled to increase the prices of their vehicles. In the current financial year that will end on March 2014, the sales figures are expected to register a downfall as compared to same period last year.
