Carmakers hike prices as rupee fall raises input costs

Be prepared to shell more for your dream car. Hit by falling rupee and rising input costs, Maruti Suzuki India (MSI) and luxury carmaker Mercedes-Benz on Thursday announced a hike in the price of their vehicles. 

While country’s largest carmaker said it has hiked the prices of its vehicles by up to Rs 6,100 in order to partially offset the increase in commodity and distribution costs and adverse foreign exchange rates, the German firm will hike prices of its vehicles across models by up to 4% from September. 

Maruti Suzuki said the price change varies across models and is up to Rs 6,100. The new prices came into effect on Thursday.

MSI sells a range of vehicles from entry-level Alto 800 to mid-sized sedan Ciaz, which were priced between Rs 2.51 lakh and Rs 11.51 lakh prior to the hike.

Earlier this month, MSI senior executive director (marketing and sales) R S Kalsi had said the company had been analysing the adverse movement of commodity prices which were going towards the higher side.

Besides, the foreign exchange rate had impacted the company adversely, while the fuel prices, too, have increased, adding to the logistics costs, he added. 

Other companies such as Mahindra & Mahindra, Tata Motors and Honda Cars India have also announced price hikes from this month citing rising input cost. Earlier in April, luxury carmakers such as Audi, JLR and Mercedes-Benz hiked prices in the range of Rs 1-10 lakh to pass on the increase in the custom duties. 

Mercedes-Benz said the rising inflation due to geo-political dynamics, coupled with rising input costs and increasing forex rates has been exerting significant pressure on overall operations.

While the rupee has depreciated by more than 5% against the euro in last eight months, the repo rate has gone up by 0.5% in the last couple of months, it added.

“The combination of all these factors led Mercedes-Benz India to upwardly revise the prices of its entire model range and also the retail finance rates,” it said.

The upward revision of the price across the entire model range will be effective from September 1, 2018, and would be up to 4% depending on the model, the company said.

Commenting on the step, Mercedes-Benz India MD and CEO Roland Folger said, “Considering the rapid depreciation of the rupee against the major currencies in last few days, we were left with fewer options, but to make some necessary price adjustments to our product range at the moment.” A steady rise in input costs against the backdrop of an unfavourable forex rate and high inflationary cost together have had a significant impact in the recent past, he added.

Mercedes-Benz currently sells a range of sedans and SUVs starting from the A-Class to GLS luxury SUV and Maybach S560, priced between Rs 27.86 lakh and Rs 1.94 crore.

Other companies such as Mahindra & Mahindra, Tata Motors and Honda Cars India have also announced price hikes from this month citing rising input cost. (With inputs from agencies)

MAKING A BIG DENT

• While Maruti Suzuki’s price hike came into effect on Thursday, Mercedes-Bez will hike prices from September
   
• In April, luxury carmakers like Mercedes-Benz, Audi, JLR had hiked prices in Rs 1-10 lakh range