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Sunday, March 20, 2011

Tata cars ready to hike car prices by Rs.7, 000-36,000

Tata Cars
Tata Motors on Friday said it will increase prices of its passenger vehicles with effect from April 1, to ease out rising input costs. The price increase will range from R7,000 to R36,000, depending upon models.

Even other automakers said they are closely monitoring the situation for a possible price hike next month.

In the passenger cars segment, depending upon the model, Tata Motors' Indica prices will go up by R7,000 to R9,000, Vista and Indigo CS by R8,000 to R11,000 and Manza by R10,000 to R15,000.

In the utility vehicles segment, depending upon the model, Sumo prices will go up R13,000 to R15,000, Grande by R16,000 to R19,000, Safari by R18,000 to R29,000, Aria by R30,000 to R36,000 and Venture by R9,000 to R12,000. The Nano is excluded from a price hike.

Jnaneswar Sen, vice-president, marketing, Honda Siel Cars India, said, “We will be undertaking a price hike from April 1 on all our models except Accord. But we have not decided the quantum of the increase in prices.”

Commodity prices make up to 80% of the total cost of an automobile manufacturer, with steel being the largest contributor. There has been a 30% increase in steel prices over the last one year, while rubber has gone up by more than 60%.

“The margins of auto makers have already taken a betting in the last quarter due to the high input costs and they will look at passing on the burden to customers with price increase,” said an auto analyst in Mumbai.

“Commodity prices make 80% of any auto makers' cost and any adverse movement in them would increase presssure on us to raise prices. Input costs have been going up significantly and we are monitoring the situation closely.”

“We do not take any price hike till we can absorb the pressure. We raised prices by 0-2%, depending upon the model, in mid-January, and for now we have not taken a decision yet,” said Shashank Srivastava, chief general manger marketing, Maruti Suzuki India.

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