NEW DELHI: The general trend over the last few years has been that vehicle manufacturers hike prices of their models at the start of the New Year to absorb rising costs. This year is no different, with some carmakers having already announced price hikes while others are expected to follow suit soon.
for instance, Japanese carmaker Toyota on Tuesday announced a price hike of up to four per cent for the next year.
“It is very difficult to absorb the high costs now as it will start reflecting on the financial health. Going by the past trend, any hike impacts demand by two to three per cent and the impact lasts for
up to a quarter before normalising,” said N Raja, deputy managing director, Toyota Kirloskar Motor.
Raja also added that the hike announcement is more of a message to customers who may want to take a call on having a better price deal before January. It is also reported that Toyota is giving year end discounts of up to Rs 1 lakh on the available versions of its sedan Yaris and Corolla Altis in the form of exchange/loyalty benefit, insurance discount etc.
Earlier, Mahindra & Mahindra had announced that from January 1, 2019, it will increase the price of its multi-purpose vehicle (MPV) Marazzo by Rs 30,000 to Rs 40,000. The Marazzo was launched in the first week of September at an introductory price of Rs 9.99 lakh. Luxury car maker BMW too has announced a price hike of up to four per cent from January.
While other carmakers such as Ford India and Honda Motors are reportedly accessing the situation, Hyundai Motors and Maruti Suzuki who hold over two-thirds of the market, are yet to make any announcement. Industry experts say that this year, a few players may delay announcing a price hike as their dealer showrooms are struggling with high inventory, primarily due to dull festive season sales. “While price hikes are generally announced to offset rising input costs and boost year-end sales, this year the situation is different. Even if OEMs announce a price hike, the total impact will be negligible as they are already giving massive discounts,” said an industry expert.
