Auto cos hike rates as input costs rise

A fourth round of increase in automobile prices since January is on with firms such as General Motors, Ashok Leyland and Bajaj increasing rates to offset pressure from rising input costs, mainly that of steel and tyres.

Others such as Maruti Suzuki, Tata Motors and Toyota Kirloskar are also evaluating options.

While Ashok Leyland on Tuesday said it will increase prices of the entire range of commercial vehicles by anything between Rs 20,000 and Rs 50,000 with immediate effect, Hero Honda and Bajaj Auto have already hiked their two wheelers prices by up to Rs 1 ,000.

Auto makers have already hiked their prices thrice this year —— first in January due to rise in input costs, second following a two per cent excise duty hike in the Union Budget and third after the introduction of the new emission norms.

“Raw material prices are increasing day—by—day and it is affecting us... Our margins are under pressure,” Maruti Suzuki India Managing Executive Officer (Marketing and Sales), Mr Mayank Pareek, told PTI.

He, however, said the company has not decided yet on increasing the prices of its products. “We are in the process of finalising our contracts with our suppliers and any decision on price increase will be taken after that,” Mr Pareek said.

General Motors Vice President, Mr P Balendran, said the company will hike the prices by up to 2 per cent from July 5.

“Prices of raw materials, mainly steel and rubber, have risen sharply since the second quarter of last year... We are forced to increase prices this time,” he added.

The company has planned to hike the prices between Rs 1,000 and Rs 15,000 for different models.

Steel prices have risen by as much as Rs 6,000 a tonne since January on account of rising demand and increase in iron ore and coking coal rates.

Likewise, tyre prices also increased in recent past due to rising natural rubber costs. Tyre manufacturers have hiked prices by about 10 per cent this year and indicated a further hike of up to 25 per cent in the rest of the year. - PTI