Maruti Suzuki, the country’s largest carmaker, said it will hike prices next month by an unspecified amount to offset cost pressures and meet regulatory requirements that kick in from April 2023. This will be the second hike of the year by the car market leader with the first one coming in April.
The Delhi-based maker of Baleno, Alto and Brezza said, “While the company makes maximum effort to reduce cost and partially offset the increase, it has become imperative to pass on some of the impact through a price increase.”
With Maruti Suzuki controlling 42% of the passenger vehicle market, pricing changes made by it are usually followed by its rivals. All companies will have to increase prices to meet the new vehicular emission norms (Phase 2 of BS-VI) from April 1, 2023, though they have declared that the hike will not be as steep as those seen during the switchover to BS-VI from BS-IV of 2020.
January has historically been the month when carmakers resort to price hikes; the announcements of which are usually made in December. This year, given the high retail level demand, companies are more confident of passing on the cost pressure to the consumers than they were two years ago.
Last month, Tata Motors, the country’s third-largest carmaker, hiked prices by nearly 1%. In the recently held analyst call, senior management of the Mumbai-based carmaker guided for a possibility of a further increase in the upcoming quarter to offset the hike caused by the Phase 2 of BS-VI standards.
Hyundai Motor India, the country’s second-largest carmaker, said it is not looking at any hike for the time being. SUV specialist Mahindra & Mahindra did not respond to the query. A source said that German car maker Volkswagen is contemplating a price hike.
From December 1, the country’s largest two-wheeler producer, Hero MotoCorp made effective new prices which were up to ?1500 more. This was the fourth such hike this financial year by the company.
Maruti Suzuki also warned of a shortage in production during December due to a shortfall in electronic components. “It is expected that the shortage of electronic components may have an impact on December’22 production more than that in the recent months. The company is taking all possible measures to minimise the impact. Chip shortage had an impact on November production numbers also,” Maruti Suzuki added.