Two days after market-leader Maruti Suzuki India Ltd announced a price hike, Hyundai Motor India Ltd - ranked No 2 - on Wednesday said it would increase prices all models by 2 per cent.The new prices will take effect in the first week of June.
Hyundai's hike would range between Rs 5200 and Rs. 32,200 as compared to increases of Rs 1000-18,000 announced by Maruti.
“There has been an increase of diverse magnitudes across a variety of our inputs like steel, copper, plastic and rubber. We have been absorbing it for sometime now, but (now) we have decided to pass on some of it to consumers,” said Arvind Saxena, senior vice president at HMIL.
Hyundai currently sells hatchback models Santro, i10 and the Getz along with 3 sedan variants — Accent, Verna, Sonata Embera. It also sells an SUV under the Tucson brand. Prices of steel and aluminium, critical material for car components, have been moving up steadily.
While steel producers have been demanding 30 per cent more for long term contracts under negotiations with car makers, aluminium prices have risen 25 per cent since January 21. A typical car could contain up to 80 kilos of parts made of aluminium, which costs up to Rs 10,000 at current levels.
Industry officials said this may not be the last of the price hikes. Even after protracted negotiations, auto industry has still not been able to finalise prices for steel under existing ,long term contracts. Maruti, for example, has said that it will take another fortnight for the contracts and a price fluctualtion in that period could change things further.
A Maruti official, who spoke on condition of anonymity said, more price revisions could follow if steel makers don't keep their promise (made to the government) to hold the price line.
While Mahindra and Mahindra and Honda Siel Cars India have already increased prices, General Motors has said it will announce new prices by the end of this month. Tata Motors has yet to take any decision.