It’s the first in a series of price increases that the auto industry is likely to see in the coming months. Maruti Suzuki has just increased prices on its diesel cars by between Rs. 2,000 and Rs. 10,000. This price increase affects diesel models of the Ritz, Dzire, SX4 and Swift.
Prices of the diesel Maruti Ritz have gone up by Rs. 2,000 only, while the Dzire, SX4 and Swift are Rs. 10,000 more expensive now. The entry-level Maruti Swift LDi, will now cost Rs. 5.28 lakh, while the the top-end ZDi model will cost Rs. 6.49 lakh, ex-showroom Delhi.
Maruti claims the price increase is due to the increasing cost of raw materials as well as a slowdown in the auto industry in terms of car sales. It also says the cost of its imported components from Japan has gone up because the Yen has appreciated making imports more expensive. Components such as the gearbox are still imported on some Maruti models. Also read: Maruti Suzuki SX4 diesel road test
However, because the demand for petrol cars has dropped significantly, there has been no price increase on any of the petrol models. In Maruti’s case, the demand skew is as high as 80% in favor of diesel models.
Since June this year Maruti has been struggling with production issues because of ongoing labor unrest at its Manesar plant. The Manesar plant makes the Swift, Dzire, SX4 and A-star. All these cars saw their sales being badly hit in the past few months due to the strike. To try and normalize the situation Maruti shifted Swift production to its Gurgaon plant, and managed to keep up deliveries.
Last month, Maruti managed to sell about 7,800 Swifts. But cars like the A-star and SX4 have been hit hard. The SX4 sold an average of 2,800 cars in the first six months of the year, but in September sales dropped to just 196 cars and in October it was just 320 cars, losing out on one of the most profitable months for carmakers otherwise. The A-star’s sales have dropped to an all-time low of 277 cars only. Also read: Best diesel small car in India under Rs.8 lakh
If you are looking to buy a diesel car, now would be a good time to book one, as there is significant uncertainty on the prices of diesel cars in the coming months. After the festival discounts have all exhausted themselves and carmakers begin to feel the pinch on profit margins, prices are bound to rise. Maruti has just increased prices and other carmakers may soon follow suit.
But if you’re looking for a petrol car, that silver lining is still intact. Discounts are still available on some models and petrol prices are coming down by 80 paisa not that that’s going to make much of a difference to your running cost.