Maruti Suzuki India, the country’s largest carmaker, announced it will increase prices from January next year to offset the impact of rising costs. The price increase would vary from model to model, the auto major said, without revealing the details.
In a regulatory filing, Maruti Suzuki said: “Over the past year, the cost of the company’s vehicles continues to be adversely impacted due to increase in various input costs. Therefore, it has become imperative for the company to pass on some impact of the above additional costs to customers through a price hike.”
The auto major already hiked prices three times this year – by 1.4% in January, 1.6% in April, and 1.9% in September, taking the total to 4.9%.
The company said cited the rising prices of essential commodities such as steel, aluminum, copper, plastic and precious metals over the last year as the reason to increase prices. Its material costs account for about 75-80% of the cost structure.
Other automakers have also increased prices this year, but claim it was not because of the rise in input costs.
Rival Hyundai Motor India is said to be watching the situation and may increase prices if inflation and chip availability continue to remain difficult.
MG Motor India President and Managing Director Rajeev Chaba said they have not been able to pass on the cost pressure to customers and hinted at more price hikes in the future, the Economic Times reported.
Steel prices have risen from 38 rupees per kilogram in April-May, 2020, to 77 rupees. The cost of aluminum has also gone up from about $1,800 a tonne to $2,700. In addition, the car companies have to contend with chip shortages.