Car manufacturers are again planning to increase car prices for the third time this year. The mounting raw material cost is drawing the car industry incessantly to evaluate its prices and go for regular hikes. The car prices were raised in January by 3% followed by another hike in May-June when prices went up by 4%. However, Honda Siel Cars India is first in the list to increase its prices of the City by Rs 15,000,
Civic by Rs 20,000 and the newly-launched Accord by Rs 30,000.
According to the car manufacturers, “The two hikes this year were too small to counter the rapid rise in raw material costs. Prices are likely to increase up to Rs 5,000 for mid-segment cars and up to Rs 12,000 for the bigger vehicles and SUVs.”
According to Mahindra & Mahindra president, “Clearly, nobody has taken the quantum increase of input prices. The basic increase in raw material prices is over 30%, while car prices have gone up by mere 3-4%. It is not off-setting the entire impact and will be hitting our bottom line. We have no choice but to pass on the burden to customers.”
P. Balendran, Vice-President of corporate affairs General Motors said, “Going forward, we shall review prices of our cars. We are evaluating the impact of the massive increase in input prices to take a firm decision.”
Apart from the latest gush in input costs, the car industry is trying to shield its margins to keep up its profitability and wisely take up the recently imposed specific excise duty of up to Rs 20,000 on all vehicles above 1500 cc.