PUNE: New car models from New Year are going to cost more as automakers gear up for a price hike between one per cent to five per cent despite struggling to sell vehicles in a market facing the worst auto slowdown in India in more than a decade.
Auto analysts said car makers usually hike prices from January to get rid of the unsold 2019-badged vehicles at showrooms before the year-end.
According to automakers tepid sales and heavy discounts have eroded profit margins, leaving them no room to accommodate surge in input costs.
In fact, from January automakers are hiking prices of their car models up to five per cent despite struggling to sell vehicles in Asia’s third biggest economy.
Car makers such as Nissan, Mercedes-Benz, the German luxury car maker, Hyundai, and India’s biggest motorcycle maker Hero MotoCorp have officially announced a jump in prices while other major automakers are likely to follow suit.
They said hike in prices is aimed at offsetting the increase in various input and commodity costs.
“In the current challenging market conditions, we are constrained to increase the price of all Nissan and Datsun models up to five per cent across its models.due to increased costs. The proposed price increase will be effective from January 2020,” Rakesh Srivastava, managing director at Nissan Motor India told Financial Chronicle. While Datsun redi-GO cost `2.8 lakh, Nissan Kicks SUV goes upto `15 lakh.
Mercedes-Benz said it had revised the prices of its entire model range upto three per cent effective from the first week of January 2020.
“We have been reviewing the various cost escalations, including the rise in the commodity and input costs that have been exerting pressure on our bottom line,” said Martin Schwenk, managing director and CEO at Mercedes-Benz India.
He said to run a sustainable business and protect its customers’ investment in the brand, there is a need to offset the impact of these rising costs through a moderate price correction.
Its compatriot rival Audi India would also raise the prices of all its models by one per cent next month, industry sources said.
Swedish luxury car maker Volco Cars declined to comment while Tata Motors-owned British luxury brand Jaguar Land Rover said there is no price hike.
Hero MotoCorp said the price increase from January 1 across its range of two-wheelers will be upto `2,000, although the exact quantum of the increase will vary on the basis of the model and the specific market.
Maruti Suzuki, India’s largest car maker, has also hiked prices of its entire car range from January to offset rising input costs.
It said in a regulatory filing that over the past year the cost of company’s vehicles had been impacted adversely due to increase in various input costs. “Hence, it has become imperative for the company to pass on some impact of the above additional cost to customers through a price increase across various models in January 2020,” it said.
This quantum of price increase, which shall vary for different models, has not been decided yet, the company said. Its entry-level small car Alto to premium multi-purpose vehicle XL6 are priced between `2.89 lakh to `11.47 lakh at Delhi showroom.
Other automakers such as Mahindra & Mahindra and Toyota Kirloskar Motor are also reviewing price hike of its models from January.