New car buyers to spend more this festive season
By ENS Economic Bureau | Published: 20th September 2013 09:04 AM |
Despite low sales, automobile makers have been forced to increase prices of their products to offset impact of rupee depreciation and rising input costs. Many car manufacturers have announced steep price hike denting revival prospects during the upcoming festive season in India.
The latest increase by up to `20,000 is by Korean company, Hyundai. “We will be increasing the prices from October 1 by `4,000 to `20,000 across models except our new model Hyundai Grand, which has been recently launched at an aggressive introductory price,” Rakesh Srivastava, HMIL Senior Vice-President, Sales and Marketing, said in a statement.
Indian automobile sales have witnessed the ninth negative sales month with the exception of some foreign brands who have witnessed high sales. Barely a few days ago, Japanese car company Toyota Kirloskar Motors announced a price increase of `24,000 on all its key models, including its flagship Innova. Other companies like Ford, Mercedes, General Motors, Audi and BMW have announced price hikes.
“The rupee depreciation and inflationary trends have impacted our input costs. We have been absorbing most of the costs but now we are compelled to consider the price increase,” Srivastava said.
General Motors India, which hiked prices of its three models car Beat, SAIL and multi-purpose vehicle Enjoy by up to `10,000 earlier this month, said it is undertaking another round of increase of up to 1.5% across all models.
“We are increasing the prices of all models, including those which recently saw a hike, at a range of 0.5 per cent to 1.5 per cent,” General Motors India Vice President P Balendran said.
Tata Motors also said it plans to hike prices in the range of 1-1.5 per cent across its passenger cars and commercial vehicles, while Maruti Suzuki India (MSI) said it is still evaluating the situation.
“While we evaluate impact of the increasing costs, we would like our customers to have a good festive time. On price increase we continue to evaluate options,” a MSI spokesperson said.
Overall domestic sales during April-August 2013 declined by 0.83% when compared to the same period last year. Passenger vehicles saw a de-growth of 5.30% while passenger cars saw a decline of 5.80%. During the same period, exports of passenger vehicles saw a 12.35% increase as most car companies are trying to salvage the falling consumer sentiment in the domestic market. (With agency inputs)