Carmakers contemplate price hike from New Year to counter rising input costs

Carmakers like Tata Motors, Honda and Renault are looking to increase vehicle prices from January 2022 to offset the impact of input costs. Maruti Suzuki, Audi and Mercedes-Benz have already announced that they would be hiking vehicle prices from next month.

While Maruti, as per PTI, said the price rise planned for January 2022 will vary for different models, Mercedes-Benz said its hike will be on select models by up to 2% due to feature enhancement and rising input costs. Audi, on the other hand, said its price increase effective January 1, 2022 will be up to 3% across its entire model range owing to rising input and operational costs.

Shailesh Chandra, Tata Motors President, Passenger Vehicles, told PTI that prices of commodities, raw material and other input costs continue to rise. “An appropriate price hike to at least partially offset this increase in costs seems inevitable in the near to short term.” The company sells models like Punch, Nexon and Harrier in the domestic market.

Honda Cars India is also considering price increase in the New Year. A company spokesperson noted that there is a severe impact on input cost due to commodity prices’ increase. “We are still studying how much can be absorbed.” The maker of brands like City and Amaze had last hiked the vehicle prices in August 2021. Renault stated it is also looking at a substantial price increase across its vehicle range from January. The French company sells models like Kwid, Triber and Kiger in the Indian market.

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The companies have been forced to take price hike, with substantial increase in prices of essential commodities like steel, aluminum, copper, plastic and precious metals over the last one year. Besides, transportation cost has gone up in recent times affecting the total cost structures of original equipment manufacturers (OEMs).