The Hindu Business Line : Car makers poised to hike prices

New Delhi, Dec. 7 With New Year around the corner, car makers are gearing up to hike prices across models. This is also being seen as a strategy to lure customers to make their purchases in December, before the hike, and liquidate stocks.

Maruti Suzuki, the largest player in the segment is expected to hike its prices next month by about Rs 2,000-Rs 3,000 across all models, according to a cross section of car dealers. Similarly, a hike can also be expected from Hyundai Motor India and General Motors, who cite high input costs as the primary reason.

“With high inputs costs, we will raise the price by up to 2 per cent,” said Mr Ankush Arora, General Manager, Marketing, General Motors. However, Tata Motors and Honda may not follow the same strategy.

While Tata Motors’ spokesperson refused to comment, Honda Siel’s official spokesperson said that the company had not considered any such move for now.

“Customers are usually looking for attractive discounts. There will be lot of offers this month especially after December 15. It is the peak season for auto sales,” said Mr Rajan Pental, Senior Vice-President, Auto loans, HDFC Bank.

Usual practice

Dealer sources said that this was a usual practice among most car makers during the year end, as customers are reluctant to buy the previous year’s model. “This is a usual trend every year in January, February and March when prices go slightly higher. After March, manufacturers start offering discounts,” said a Maruti dealer.

Another reason cited is the fluctuations expected in the Budget. “Anticipating some kind of excise cut on cars or any kind of increase in duty structure, manufacturers hike prices allowing for adjustments that may have to be made later on. So that even if duties are cut, they will have some advantage,” said an industry source.