NEW DELHI: Struggling to cope with the depreciation of rupee value, auto major Tata Motors on Wednesday said it is likely to announce a price hike on its passenger vehicles in December. “Because of rupee depreciation, our imported components become expensive and it puts a pressure on profitability. First, we analyse whether we can absorb the impact, but if it crosses a certain limit, we go for the hike. Maybe in December we would go for a hike,” Mayank Pareek, president, PV Business Unit, Tata Motors, told TNIE on the sidelines of the new Tigor launch (ex-showroom price between `5.20 lakh and `7.38 lakh).
At present, Tata imports around 25-30 per cent of its components. On Tuesday, the rupee slumped by 33 paise to finish at a fresh lifetime low of 74.39 against the US dollar. So far this year, the rupee has depreciated 14 per cent on the back of rising crude oil prices and US-China trade war, among other factors.
However, despite the rupee fall and rising fuel prices, the company expects a decent growth over the upcoming festive season on the back of their new initiatives.
“So far, we have launched fresh versions of our three popular cars, and very soon, we will upgrade our SUV Hexa. It has created excitement in the market,” Pareek said, adding, “Although market sentiment is muted because of higher fuel prices and non-availability of finance, I think the industry will see a turnaround this quarter.”
Facing similar macro-economic challenges, Honda Cars India (HCIL) said that a price hike is “under consideration”. “This year, the economic scenario is different than last year. The rupee is weakening, fuel prices are increasing, interest rates are going up.
These fundamentals are not favourable to the automotive market. A price hike is under consideration, but as a manufacturer, we try to absorb such kind of negative impact as much as possible,” said Gaku Nakanishi, president & CEO, HCIL. Honda, which recently launched the fifth generation CR-V in India priced between Rs 28.15 lakh and Rs 32.75 lakh (ex-showroom), is confident of achieving a healthy growth in the upcoming festive season.