Maruti Suzuki car prices rise: Maruti Suzuki to raise prices for third time this year as input costs contract
The company did not specify the amount of the increase, but in a file filed with the stock exchanges, it said that “over the past year the cost has continued to be negatively affected due to the ‘increase in various input costs. Therefore, it has become imperative to pass on some impact of the additional cost to customers through an increase in prices. ”
The statement added that the price hike was expected for all models in September 2021. The company had announced plans to increase vehicle prices in the second quarter earlier in June this year.
sells a range of models from the entry-level Alto hatchback to the S-Cross sedan, priced between 2.99 lakh and 12.39 lakh (ex-Delhi showroom).
This will be the third price increase across the company’s entire portfolio this year. Maruti Suzuki had increased its prices in January and April. On April 16, it announced an increase of around 1.8% in non-showroom (Delhi) prices for all models. On January 18, the automaker had raised the prices of some models by as much as 1.4-1.5%.
The automaker also raised prices for CNG vehicles in July this year. Shashank Srivastava, senior executive director (marketing and sales) at Maruti Suzuki, told ET that the company has so far undertaken a price increase of less than 4%; however, the increase in commodity costs has been much higher.
“Normally, we keep pace with rising raw material costs. However, the industry was in a state of flux and shrank by 18% around the time we switched to BS-VI emission standards. And just as we were looking for ways to revive demand, there was a nationwide foreclosure after which sales fell again by around 80% in the first quarter (FY21). So even if the prices of raw materials increased, we did not want to undertake price increases and disrupt any recovery in demand, ”Srivastava said.
PV sales in the local market fell by 18% to 2.78 million units in FY20, and again by 2.24% to 2.71 million units in FY21 . Meanwhile, the prices of key commodities have increased the multiple pressure margins of automakers. Steel prices have increased 70% over the past year; copper and rhodium prices increased by 112% and 255% during the period considered. Although commodity prices have fallen in recent weeks, there has been no decline.
In addition to Maruti Suzuki, several major automakers from Tata Motors to Mahindra & Mahindra (M&M), Honda Cars India and Toyota Kirloskar Motor (TKM) have also raised vehicle prices over the past two months to partly absorb the sharp rise in prices. raw material procurement costs.
The latest wave of vehicle price increases precedes the holiday season, when automakers in the local market have made efforts to recoup lost volumes over the past two years.
“OEMs are currently facing a difficult situation; there has been a sharp increase in the costs of raw materials; they also have to pay higher prices for semiconductors. Production remains phased out due to supply side challenges, ”said Ravi Bhatia, President of Jato Dynamics India.