Telco To Jack Up Vehicle Prices

Telco may increase prices of most of its models next month. The Tata automobile major is contemplating a 4-5 per cent increase in prices of most of its models other than those fitted with Cummins engines, industry sources said.

The proposal to hike prices has been pending for some time now. The increase had been delayed on account of the sluggish market trends, the source added.

However Tata sources when contacted said that "there was no firm plans of a price increase at this point in time.''

"The company has not increased prices on many model for more than a year. The last time it had hiked prices was last May, hence an increase is on the cards,'' the industry source said. Analysts too felt that since Telco had not gone in for a price increase in the second half of 1996, a hike was due. The company had raised prices by an average three per cent in January-February last year, and another three per cent in May 1996.

 

"The company's first half margins were very strong primarily on account of the hike in prices,'' the analysts added.

It may be mentioned that the prices of all utility vehicles including the Tata Sumo, have increased following the five per cent rise in excise duty to 25 per cent in the recent budget from the earlier 20 per cent.

The prices of the vehicle has gone up by Rs 10,000-Rs 12,000 as a result of this excise correction.Currently the ex-Mumbai price for Telco's 407 model is Rs 3,51,359, and that of the 709 is Rs 4,07,064. The price for the 1612 and the multi-axle models are Rs 5,46,987 and Rs 7,04,270 respectively.

The ex-Mumbai on the road price for the Tata Sumo and the Sumo Deluxe is Rs 3,92,766.56 and Rs 4,80,419 respectively. During April to February 1996-97 Telco produced 94,966 vehicles in the HCV segment as against 81,756 units during the corresponding period in the previous year.

In the LCV segment too Telco's production shot up to 84,636 units during April-February 1996-97 as against 68,314 in the corresponding period the previuos year.

However Telco's sales in the passenger car segment dropped to 6,484 units during the period as against 8,968 units in the previous period. Sales of Mercedes Benz rose to 1,766 units from 79 units during the period.

The current year has seen a depressed automobile market for most part. While sales reportedly grew by 14 per cent production increased 18 per cent thereby leading to a inventory build-up.