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Get set to pay more for your dream car

As high input cost continue to squeeze the profit margins of automakers, Maruti Suzuki India Ltd (MSIL), the country's largest carmaker, has increased prices of its models by Rs 1,100 to Rs 9,000.

Anuradha Shukla | April 6, 2011 | Updated 17:33 IST

As high input cost continue to squeeze the profit margins of automakers, Maruti Suzuki India Ltd (MSIL), the country's largest carmaker, has increased prices of its models by Rs 1,100 to Rs 9,000.

Tata Motors has already hiked the price of its passenger vehicles by up to Rs 36,000 with effect from April 1 and other automakers may follow suit very soon.

"We have undertaken a price hike across models ranging from 0.2 per cent to 2.4 per cent," the Maruti Suzuki spokesperson said. The price hike came into effect from April 4, across the country.

This increase will be translated into minimum hike of Rs 1,100 and a maximum of Rs 9,000 depending on model, the official said.
At present Maruti produces 15 models in India ranging from the entry level small car M800 with a starting price of Rs 1.97 lakh to the latest sports sedan Kizashi, which is priced up to Rs 17.5 lakh (ex-showroom Delhi).

Despite very good auto sales numbers, MSIL posted a decline in year-on-year net profit for the October-December quarter. The firm had reported an 18 per cent decline in third quarter net profit as higher royalty payouts and rising input costs weighed on margins.
"Even when the sales are good, the sector is struggling with high input cost. The price of all of the key ingredients such as steel and rubber have gone up considerably also that is hurting the profit margins of all the carmakers. There is a continuous pressure to increase price," Mayank Prateek, managing executive officer (marketing and sales) MSIL, had said a few weeks back.

Apart from that even auto part manufacturers have been putting pressure for an increase in the prices of their products. This is the second time this year that Maruti Suzuki has raised the prices of its vehicles. Last time most of the carmakers went for a price hike citing high inputs cost as the reason.

Maruti Suzuki had announced an increase in the price across all its models by 2.4 per cent which translated into up to ` 8,000 depending on the model. However the company did not increase price of Alto K- 10. Other companies like Hyundai and Mahindra and Mahindra are also mulling an increase in prices of their products. Korean auto major Hyundai Motors India Ltd. also said it may go for a price hike.

"We are also considering price hikes but the quantum and the date has not been finalised yet. We need to take the step to offset rising input costs," an HMIL spokesperson said. Even Mahindra and Mahindra which was holding price of its vehicles for long is considering an increase in the coming days.


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