Carmakers embrace price hikes to offset rising input, manufacturing costs

Automakers are increasingly opting for smaller, more frequent price increases to offset rising input and manufacturing costs, rather than implementing annual hikes

Cars in India have become costlier by a few thousand rupees to as much as ₹30,000 this calendar year, while luxury vehicles are seeing increases running into several lakhs of rupees, as automakers roll out repeated price hikes to offset rising commodity rates, higher input costs, and mounting manufacturing expenses.

 

The latest increase came from Tata Motors Passenger Vehicles, which on Friday announced a fresh price hike of up to 1.5 per cent across its passenger vehicle (PV) lineup, including both internal combustion engine (ICE) and electric vehicles (EVs), effective July 1, 2026. The move comes barely three months after the company had already raised prices of its ICE portfolio by a weighted average of 0.5 per cent from April 1.

 

The latest increase could translate into a price rise of roughly ₹10,000-30,000, depending on the model and variant, based on current vehicle pricing across Tata Motors’ (TaMo’s) portfolio.

 

The back-to-back revisions underscore a broader trend emerging across the industry in 2026, with automakers increasingly opting for smaller but more frequent price increases rather than large one-time annual hikes.

 

According to Saharsh Damani, chief executive officer (CEO) of the Federation of Automobile Dealers Associations (Fada), manufacturers that traditionally implemented annual price revisions at the beginning of the year are now spreading increases across multiple quarters.

 

“Traditionally, original equipment manufacturers (OEMs) used to take price hikes of around 2-2.5 per cent in January. This time they delayed those hikes and are now implementing staggered increases of 0.5-1.5 per cent instead of giving consumers a sudden jolt,” Damani said.

 

He added that rising raw material prices, higher manufacturing expenses, elevated energy costs, and global commodity volatility are driving the repeated revisions across the industry.

 

Among mass-market carmakers, Maruti Suzuki has announced that it would raise prices by up to ₹30,000 across its lineup from this month, citing continued inflationary pressures and rising input costs. The price hike, however, is yet to be implemented.

 

Hyundai Motor India has implemented two rounds of price hikes this year — a weighted average increase of around 0.6 per cent in January, followed by another increase of up to 1 per cent from June. Depending on the model, prices have risen by roughly ₹3,500-12,900.

 

Mahindra & Mahindra initially avoided a broad-based New Year price revision but later implemented a portfolio-wide increase of up to 2.5 per cent across its SUV and commercial vehicle (CV) range from April 6, citing rising input costs.

 

Luxury carmakers have also joined the ongoing pricing cycle. BMW recently announced a price increase of up to 3 per cent across its model range from July, while Mercedes-Benz India has indicated it will continue taking calibrated price actions across quarters to mitigate rising operational costs and currency fluctuations.

 

Damani said the current round of hikes is unlikely to materially affect demand as the increases remain relatively modest in percentage terms. However, he cautioned that if commodity inflation and manufacturing costs continue to rise, automakers may keep on revising prices more frequently. 

Price pinch

• Tata Motors Passenger Vehicles to raise prices by up to 1.5% across its PV lineup from July 1
• Maruti Suzuki announced a hike of up to ₹30,000 across its lineup, but implementation is pending
• Hyundai Motor India has raised prices twice this year — by about 0.6% in January and by up to 1% from June
• Mahindra & Mahindra increased prices by up to 2.5% across its SUV and commercial vehicle range