It is no hidden fact that the Indian car market is suffering from a slump in recent times. The current crisis in the Indian economy has bogged down all industries, including that of automobiles. The value of rupee has constantly fallen over the past year, resulting in widespread price rise across the country. This has directly resulted in the rise of cost for auto makers, forcing them to hike prices of their vehicles in order to protect their profit margins. In the recent past, companies like General Motors, Mercedes-Benz and Audi have increased the price of their vehicles. Joining the bandwagon of these auto makers, Japanese car maker Toyota has decided to increase the price of its vehicles. According to reports, Toyota Kirloskar Motor is going to hike the prices of Fortuner Sports Utility Vehicle (SUV) and Camry Hybrid sedan by around 1 per cent.
Industry experts believe that there are a lot of reasons why non-Indian car makers are increasing the prices of their vehicles. Even though a lot of them have production facilities established in India, companies still get a lot of parts imported from other countries. And due to the consistently falling value of the rupee has automatically increased the cost levels for auto makers. Also, there are numerous companies in the market, which bring their vehicles to India as Completely Built Units (CBUs), something that forces them to keep the price of their cars high.
Even in the case of the Camry Hybrid and Fortuner, Toyota depends a lot on foreign imports, which has given rise to the need for increasing the price. According to sources, the Indian arm of the Japanese car maker imports parts of the these cars and then assembles them in India. Statistics suggest that the Toyota Fortuner will now cost around Rs. 22000 more whereas the Camry Hybrid will be priced higher by around Rs. 25000 - Rs. 28000.
Sandeep Singh, Deputy Managing Director and Chief Operating Officer for Marketing and Commercial at Toyota Kirloskar Motor, stated the reasons due to which the company has been compelled to increase the prices of the Fortuner and Camry Hybrid. “With the rupee depreciation and rising inflation we have increased the prices of Camry Petrol and Fortuner. The prices have been increased by 1 per cent," he said.
It must be noted that the past few months have not been good for the Indian car market as firms have been experiencing a continuous fall in sales. Also, crisis in the economy, resulting in fall in the value of rupee and rising interest rates have worsened things for companies. Auto makers have been trying different strategies to battle the slowdown and counter poor sales.
