As we had reported earlier, the largest Indian Automotive manufacturer has announced an increase in pricing of select models in its portfolio, with prices expected to increase up Rs 10,000. According to the company, the new prices will be effective immediately from the 10th of January 2019. As mentioned in our report in December, the impact of rising commodity prices and foreign exchange rates have been responsible for the increased rates. This is part of a cyclical revision of price that has become an annual norm with the Automotive industry to offset costs. Maruti Suzuki who announced the price hikes earlier in December did not specify the quantum of the increase at the time, now with this announcement they will join the likes of Hyundai, Tata Motors, Ford, Honda, Renault, Nissan, Toyota and BMW all of who have made similar price hike announcements citing these reasons.
As per this, India has witnessed an increase in exchange rates when it comes to commodities like steel, aluminium and other metals which has increased the cost burden on automakers. To ensure that profits are not affected auto companies offset the cost onto customers. Other factors like increasing price of fuel and the rise in transportation of cost of vehicles to the dealership, another factor in the macro perspective is the fact that corporate loans too have got more expensive which adds to the companies pay out burden.
Maruti Suzuki has been selling strong despite the downturn in the market with 7 of the top 10 best selling cars in India being a Maruti Suzuki. Most recently, the company added to their portfolio with the refreshed Ertiga that was launched with a starting price of Rs 7.44 lakh. Although this is also likely to change after the hike announcement. Maruti Suzuki will also bring the new Wagon R to the forefront in the coming month to take on the likes of the new Santro and the Tata Tiago on the 24th of January 2019.