A spike in commodity costs, worsened by the ongoing war in West Asia, may force automotive and durable firms to consider price hikes in April, executives that FE spoke said. This may come at a time when urban demand is beginning to stabilise for both categories, following GST price cuts initiated in September, which led to a sales boost for companies.
While auto firms such as Maruti Suzuki have desisted from increasing prices in January to ensure that the GST-fuelled demand for vehicles does not suffer, it may not be able to hold on to price lines in April as metal and plastic costs escalate sharply, sector experts said. Others such as Tata Motors, Hyundai and two-wheeler makers such as Honda have taken up prices as is customary for auto majors to do so at the start of the calendar year.
Typically, annual price hikes of around 2–6% are announced at the beginning of the calendar year in auto. But, in periods of higher volatility in commodity prices, as seen in 2025, some manufacturers have implemented multiple price increases within the year, experts said.
Durable makers, on the other hand, had taken up prices by about 5-6% in January this year when the energy table for cooling products such as refrigerators and air conditioners was revised. Executives at durable firms anticipate a price hike of about 5-6% in April following an escalation in commodity costs.
Navigating Supply Chain Volatility
“Higher oil prices push up the cost of crude-linked derivatives such as polypropylene and polymers, which are used in the manufacture of home appliances. Metals such as copper and aluminium have inched up and the rupee has been weakening as well. If this trend continues, it will put pressure on consumer pricing in the near term,” Kamal Nandi, business head and executive vice-president, appliances business, Godrej Enterprises Group, said.
Base metals such as copper and aluminium have rallied almost 30% over the last two months, while steel prices have firmed up by 12-15% in the same period, commodity experts said, putting pressure on user industries. Crude oil prices have crossed $90 to a barrel in a week since the war in West Asia began, with the forecast being that it could touch $100 per barrel in the ensuing weeks as the war drags on.
NS Satish, president, Haier Appliances India, also points to the shortage of memory chips, which could push up the price of LED TVs in the future. “This is a difficult period for manufacturers. The shortage of memory chips has been on for some time. On top of that, the ongoing war in West Asia is disrupting supply lines and pushing up manufacturing and freight costs. There will be some impact on product pricing in April,” Satish said.
In an interaction with FE last month, executives at Tata Motors said that despite increasing localisation and improving process efficiencies to offset rising input costs, it would still need to pass on a portion of these higher costs to customers. The company, however, has not yet decided on the extent or timing of such a move.
Strategic Balancing
Maruti Suzuki’s Senior Executive Officer (Marketing & Sales) Partho Banerjee said it was monitoring commodity costs closely.
“On the commodity front, prices are going up. In precious metals, the increase is phenomenal. We are keeping a very close watch… but yes, in times to come, we are going to review the price increase,” Banerjee said.
Automakers, experts said, manage commodity volatility through a mix of quarterly supplier negotiations (in the case of steel), selective hedging (especially for precious metals), long-term sourcing strategies, localisation, and cost optimisation measures. Hedging decisions are calibrated based on price forecasts and the cost of hedging.
In some cases, the industry also explores material substitution to manage costs or supply risks. For example, manufacturers have moved from heavy rare-earth magnets to light rare-earth magnets in certain applications.
Industry sources also note that critical metals still account for a relatively small share of the total vehicle cost, and the typical 2–6% annual price adjustment generally covers fluctuations across commodities, logistics and other input costs.