Reeling under heavy pressure from rising input costs, the country's largest two-wheeler manufacturer Hero Honda has hiked prices of its products between Rs 500 and Rs 1000, even as it scouts for regional vehicle financing partners to boost sales.
"Last week we have increased the prices of many of our products by Rs 500-1000. We have been trying to absorb rising commodity prices, but it has reached a stage where we need to pass it to the customers," Hero Honda Managing Director Pawan Munjal told reporters here.
Most of the company's models, including Splendor Plus, Passion Plus, CBZ, Ambition and Hunk will see an increase in prices.
"When the excise duty on two wheelers were cut (from 16 per cent to 12 per cent) we had passed on the entire benefit to the customers. But in the past few weeks the rise in commodity price has been so much that we have no option but pass on a part of it to the customers," Munjal said.
He said the recent hike in the interest rates will make it more difficult for the two-wheeler industry and the company was looking at ways to overcome the challenges by tying up with more regional and local vehicle financing partners.
"We have been looking for tying up with more local and regional financial partners. Some of our dealers have their own financing partners and it should help," he added.
High interest rates and non-availability of finance from banks for two wheelers have hurt the industry last fiscal.
"This fiscal also we see a tough year considering the present circumstances," Munjal said, adding the recent CRR rate hike by RBI would have a negative impact on the already struggling two-wheeler industry.