Toyota Kirloskar Motor mulls price hike in New Year

Written by Alokananda Chakraborty | Malabika Sarkar | Malabika Sarkar | Updated: Nov 15 2009, 03:20am hrs
Toyota Kirloskar Motor (Toyota Motor Company: 89%, Kirloskar Group: 11%), the maker of Corolla, Camry, Innova and sport utility vehicle Fortuner, is looking at a fresh round of price increase for its vehicles in January 2010. Talking to FE, Hiroshi Nakagawa, managing director, Toyota Kirloskar Motor, said, We had one round of increase in prices for the Innova and the Corolla last month. There should be another round of increase in the month of January and that would apply to all our vehicles, including the Fortuner.

Interestingly, the talk of another price hike comes at a time when there is hardly any increase in input costsinternational prices for flat steel, a key input for a motor vehicle, have come down by $50-$70 per tonne and are hovering around $540 (about Rs 25,000) per tonneand when the dollar-rupee exchange rate looks favourable (hovering at Rs 46 to a dollar, the rupee has appreciated 6.8% against the dollar since June this year).

A Delhi-based analyst who spoke off the record, indicated, that the new round of price increases may be driven entirely by the current sentiment of the market.

None of the manufacturers could go for a major increase in prices in the last one year. They were playing on very thin margins. Now that demand is picking up, price hikes are inevitable. Ultimately, all manufacturers play to the demand-supply tune, he said.

TKM officials refused to elaborate on the extent of the hike being considered. But to give a sense of what might be in store, last months increase was to the tune of 1.1-1.2% for the Corolla and the Innova, which translated to between Rs 5,000 and Rs 15,000 for the various models of the two brands.

Speculating on the expected increase, an auto analyst, who said he is close to the developments and didnt wish to be identified in the story, said, By all indications, the Fortuner will see the biggest hikeit could be as much as Rs 50,000 a piece. Priced at competitive Rs 18.45 lakh (ex-showroom Delhi)compare that to Honda CR-Vs Rs 22-25 lakh and Chevrolet Captivas Rs 21-24 lakhthe diesel SUV is selling like hot cakes and at one point had a close to three-month waiting period. TKM is hoping to sell nearly 2,500-3,000 units of the model by December 2009. It has stepped up production of the vehicle from 500 to 700 now and plans to roll out 800 units from its assembly lines by January 2010.