Other car makers such as Toyota and Tata too have hiked prices across models within the past few weeks
The price hike was inevitable. The rising cost of raw materials such as steel to manufacture cars, coupled with the change in excise duty on imported components has led to all car manufacturers having raise prices to avoid erosion in profit margins.
Maruti Suzuki, India’s largest carmaker that just sold a record 38,000 Altos in March, has been forced to hike prices of all models by up to Rs. 9,000 from April 5, due to rising input costs. This translates into a hike of between Rs. 1,000 to Rs. 9,000 across the 15 models, from the Maruti 800 to the Kizashi that Maruti sells in India. All other carmakers too have been planning price hikes.
Toyota Kirloskar Motor on April 1 said it will also raise prices of its key models by 1 to 1.5 percent, which translates in a hike of up to Rs. 20,000 across models. Toyota’s hike also comes after a record month, in which sales rose 41 percent to 9,726 units. However, Toyota refrained from hiking prices of its Etios, against which it is already facing a huge production backlog. In fact, it has deferred the launch of its Etios Liva hatchback and the diesel version of the car to 2012.
Tata Motors too said it is increasing prices starting April 1, by 2 percent. This follows the previous round of price hikes in January due to rising input costs. Tata has only spared the Nano from a price hike this time around, after hiking prices in December for the car. Tata’s price hike goes up to Rs. 36,000 for its most expensive models.
General Motors too is considering increasing prices of their cars in India recently.
If the general price hike across the country was not bad enough, residents of Delhi face a further increase in the on-road price of a car especially if you are buying a diesel car. The Delhi government has decided to increase the road tax on diesel vehicles by 25 percent, which will result in an up to 2 percent increase in the on-road price of a car in Delhi. This makes diesel cars registered in neighboring states such as Haryana and Uttar Pradesh cheaper than Delhi. This step has been taken by the Delhi government to deter the sale of diesel passenger cars, as the government feels that the subsidy on diesel is being misused by owners of luxury diesel cars.