At a time when carmakers are finding it difficult to bring buyers to showrooms than ever before, Honda Cars India Limited (HCIL) is considering to increase vehicle prices by up to 1.2 per cent from next month to offset rise in cost of raw materials as well as introduce new safety features.
“We are working on price increase on our models from July,” Rajesh Goel, senior vice-president and director (sales and marketing), HCIL, told news agency PTI. According to Goel, the cost of raw material has gone up in the last few months, but the same is now being absorbed by the company.
“This price hike is due to increase in accumulated raw material cost in the past, which we have been absorbing so far and also safety regulation implementation. The increase ( in vehicle cost) would be up to 1.2 per cent,” Goel said.
If increased, this would be the second time the Japanese carmaker would be increasing prices of its cars this year. The company had announced a price hike by up to `10,000 across its model ranges with effect from February this year.
The carmaker, like other manufactures, has witnessed significant decline in sales volumes in the recent months, as overall automotive sales have dwindled, owing to multiple factors. In May, Honda reported declining sales for the second consecutive month. The Japanese car maker sold 11,442 units last month, a drop of 27 per cent in year-on-year sales when compared to 15,864 units that were sold in May last year.
“The market continues to be tough for the auto industry with two consecutive months of such a high de-growth. It is unprecedented in the last two decades. After elections, we were expecting an upswing, which has not yet come. Factors like liquidity that is affecting capital to auto sector, along with an increase in fuel prices, have remained a challenge to revive consumer sentiments,” Goel said earlier in the month.
The company currently sells a range of models from hatchback Brio to premium sedan Accord Hybrid, priced between Rs 4.73 lakh and Rs 43.21 lakh (ex-showroom, Delhi).