May consider price hike if rupee remains weak against dollar: Honda Cars

Honda Cars India may have to go for yet another price increase if the rupee continues to be weak against the dollar, a top company official said.

The company, which sells models like City and Amaze, has been holding the price hike hoping the currency would recover from record low against the dollar.

The rupee had crashed to an all-time low of 72.91 in morning trade on Wednesday tracking higher crude oil prices that increased concerns of widening trade deficit at home.

It later rebounded from the historic low to end higher by 51 paise at 72.18 against the dollar after the finance ministry assured of steps to avert its fall to "unreasonable levels".

"We are holding the price increase because one really doesn't know if this 72 will stay or come down to 69 level. We hope it comes down, if it stays then we will have to look at a price increase," Honda Cars India Ltd (HCIL) Senior Vice President and Director (Sales & Marketing) Rajesh Goel told PTI.

Although in the festive season the company would not like to bother customers, he added hoping for a recovery in the currency.

Honda had increased the prices of its models by up to Rs 35,000 from August to offset rise in input cost.

Goel said though localisation remains high for its mass market products, in some cases around 96 per cent, still the company may have to take a call in the days to comes as nobody could have expected the rupee to slide so much against the dollar.

"For our mass market models, localisation is huge, in Amaze it is 96 per cent. We also try and increase exports...Rs 72 (versus dollar) is something which was not predicated. You plan for something which is predicted," he added.

The company, which is set to launch an all-new version of its SUV CR-V, assembles premium models in India and thereby have low localisation levels.

The Indian currency has been caught in a free fall for last few sessions and tagged among the worst performing currencies in Asia having weakened by a steep 13.81 per cent since the beginning of the year.

Asia's third-largest economy is battling with deluge of headlines covering from a range of fundamental concerns to deteriorating macro environment against the grim backdrop of surging global crude prices and sustained capital outflows.