Companies

M&M joins auto peers to hike prices

Nandana James Mumbai | Updated on January 08, 2021

Rise in input costs, weakening rupee drive trend

 

The rise in commodity prices — including steel, aluminium, precious metals and plastics — has led automakers to increase model prices from this month.

While players like Mahindra & Mahindra, Hero MotoCorp, Mercedes-Benz and Volkswagen have announced the extent of the price hikes, others are yet to do so.

M&M on Friday said it is increasing the price of its range of personal and commercial vehicles by around 1.9 per cent — an increase of ₹4,500-40,000 depending on the model and variant — with immediate effect.

Also read: Pandemic was no speed bump for SUVs

In the case of the new Thar, the current price increase will be effective for all bookings done between December 1, 2020 and January 7, 2021, the company said in a statement.

“The price increase was necessitated due to unprecedented increase in commodity prices and various other input costs over the past many months. We have made all efforts to reduce our costs and deferred price increase for a significant duration, but due to the quantum of input cost increase, we are taking this price increase effective January 8, 2021,” said Veejay Nakra, CEO – Automotive Division, M&M Ltd.

India’s largest luxury carmaker, Mercedes-Benz India, also announced an increase in the price of its models — around 5 per cent — which would be effective from January 15. The price increase will range between ₹2 lakh for a C-Class to ₹15 lakh for an AMG GT 63 s 4 Door Coupe, the company said. The price hike will be across its model range.

Increased pressure

The weakening of the Indian currency compared to the euro over the past six to seven months, combined with an increase in input costs, have been exerting significant pressure on the overall costs, the company said in a statement on Friday.

Other automakers, too, have been announcing price hikes.

Also read: M&M to focus on core SUV business, relook at capital allocation amid Covid challenges

Maruti Suzuki, the country’s largest carmaker, had announced a price hike effective from this month, citing the increase in input costs as the reason. Tata Motors said there will be a price increase across its commercial vehicle range, effective January. German carmaker Volkswagen has also said it will hike the prices of its hatchback Polo and mid-sized sedan Vento in India by up to 2.5 per cent from January.

India’s largest two-wheeler manufacturer Hero MotoCorp said that it will be increasing the prices of its products by up to ₹1,500, with effect from January 1.

Other automakers to announce price hikes include Nissan, Renault India, Honda Cars, Ford India, Isuzu, BMW India and Audi India.

Year-end sales boost

The rise in commodity prices aside, most automobile companies announce price increases from January every year, to attract customers in the December sales and liquidate the inventories at the year-end.

 

Published on January 08, 2021

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