Maruti to hike prices from April amid continued rise in input costs

India’s largest carmaker Maruti Suzuki India on Wednesday said it will increase prices of its cars from April as its costs are rising due to high inflation and regulatory requirements. The company did not specify the exact quantum of hike.

In a statement to the BSE on Thursday, Maruti Suzuki India said: “The company continues to witness increased cost pressure driven by overall inflation and regulatory requirements. While the company makes maximum effort to reduce cost and partially offset the increase, it has become imperative to pass on some of the impact through a price increase.” Maruti said the increase would vary across models.

This is Maruti’s second price increase this year. The last time, on January 16, it had raised prices of all models by around 1.1 per cent for the same reasons.

The second phase of BS-VI emission norms will be implemented from April 1 and Indian automotive companies are making requisite changes to their models to make them compliant with these regulations.

CONTINUING THE TREND 

• This is the second time this year that Maruti Suzuki is increasing its prices, citing high inflation and regulatory requirements 
• On Jan 16, it hiked prices of all models by about 1.1% 
• Rival Tata Motors has already announced price hike of 5% 
• Two-wheeler maker Hero MotoCorp hiked prices by 2%

Under these norms, vehicles must have an on-board self-diagnostic device to monitor real-time driving emission levels. The device will constantly monitor key parts, such as the catalytic converter and oxygen sensors, to keep a close watch on emissions.

Maruti’s rival Tata Motors and two-wheeler maker Hero MotoCorp have already announced price hikes of 5 per cent and 2 per cent, respectively, as they grapple with the cost of implementing the second phase of BS-VI norms.

According to the Reserve Bank of India’s (RBI’s) March bulletin, consumer price index (CPI)-based inflation in India remains high and core inflation “continues to defy the distinct softening of input costs”. Headline retail inflation moderated to 6.44 per cent in February from 6.52 per cent in January.

Meanwhile, domestic passenger vehicle (PV) sales grew by 11 per cent year-on-year (YoY) in February to 291,928 units amid positive consumer sentiment and high production, according to data released by the Society of Indian Automobile Manufacturers (SIAM) earlier this month. Two-wheeler sales, however, continued to grow at a moderate pace of about 8 per cent in February at 1.12 million units amid tepid demand.