Hyundai likely to increase prices

Carmakers seem to be going on another price hiking spree in the wake of rising input costs. After Maruti Suzuki hiking its prices by upto Rs7000, it is time for another big carmaker, Hyundai Motor India, to follow in its footsteps. Hyundai is likely to increase prices of its products due to rising input costs. According to Arvind Saxena’s, Hyundai Motor India Director (Marketing and Sales), statement, “There will be something, but I can not say when and how much... We are still evaluating it."

The year 2010 has seen the Indian car market growing at a rapid rate to become the world’s second fastest growing car market. But this year also saw a steep rise in input costs pressing the margins of many carmakers. This led to price rise across segments. Another reason for a hike in car prices has been the government policy to implement BS IV emission norms. Saxena was quoted saying, “The (rising) input costs are putting pressure on us... We are discussing internally how to handle the situation.”

Mainly the cost of raw materials such as tyres, which is an essential part of any car, is increasing gradually. Steel prices have also gone up in the past few months which is in turn putting a lot of pressure on the original equipment manufacturers. The cost of tyre has gone up by about 10 per cent in this year so far. Many believe that a hike of upto 25 per cent is possible within this fiscal.

Consumers have been spoilt for choice with more and more models launching at competitive prices. But the increasing car prices are likely to dampen their spirits. Companies including M and M, General Motors, Ford, Toyota and Maruti had increased their prices a while back. And recently it was Maruti Suzuki that had once again raised the prices of its products, except Alto, by up to Rs 7,500.

Maruti’s company official stated, “Due to a sharp increase in the input costs, Maruti Suzuki India has decided to pass on a part of this cost impact to customers. The approximate price revision on various models (Ex Showroom, Delhi) ranges between Rs 2,000 and Rs 7,500. The price increase ranges between 1 per cent and 1.5 per cent”