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Maruti raises prices, others likely to follow
NEW DELHI: Maruti Suzuki India, majority-owned subsidiary of Japan’s Suzuki Motor Co, announced its best-ever sales in a month on Monday (1,25,778 vehicles), but
NEW DELHI: Maruti Suzuki India, majority-owned subsidiary of Japan’s Suzuki Motor Co, announced its best-ever sales in a month on Monday (1,25,778 vehicles), but soon after announced it was raising prices, in a move the industry is likely to follow.
The price increase will be from ₹1,500 to ₹5,000 on most of the older models, while new cars, such as Baleno, will be ₹10,000 and Vitara Brezza ₹20,000 costlier, based on demand, foreign exchange cost and rising raw material prices.
During April-June, the yen appreciated 11% against the rupee, increasing cost of Maruti’s component imports and royalty it pays to Suzuki, resulting in the fall of Maruti’s share prices, and reduced profits, too.
This is the second time that Maruti, which sells one out of two cars in the country, has increased prices of its vehicles. It has raised prices in March due to implementation of infrastructure cess and luxury tax on cars.
Maruti’s price rise is likely to set off start an industry-wide price increase. “We are having a discussion on a price hike, but the company’s board need to approve of any hike… The input cost has definitely impacted us,” said Rakesh Srivastava, head of sales and marketing, Hyundai India.
Toyota Kirloskar Motors, another Japanese subsidiary, and maker of the Innova, is also discussing a price hike internally. “But we have not concluded the decision yet,” said a company spokesperson. Honda Motors India’s head (sales and marketing) Jnaneswar Sen wasn’t available for comment.
“Others carmakers will follow, but there will be little impact on sales as there is a good monsoon ahead, which will drive rural demand and positive sentiment,” said Amit Kaushik, India head of London-based automotive intelligence firm JATO Dynamics.
Indian auto majors sold 2,55,190 vehicles in July, signalling a strong economic rebound as most companies saw double-digit sales growth. Hyundai reported a 12.87% sales surge, Mahindra and Mahindra 14% and Ford India 62%. Sales for Renault India grew five-fold over the previous year thanks to the runaway success of its small car Kwid.
