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|3rd June 2010, 11:38||#1|
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Auto majors rule out price hike - say upward revision in prices could slacken growth
Domestic carmakers such as Maruti Suzuki, Hyundai Motor India and GM India have decided not to increase prices for now in spite of increasing input costs and soaring monthly sales on year-on-year basis. The car manufacturers beleive that an upward revision in prices could slacken the growth should euro zone financial crisis deepen and banks tighten the credit market as part of the government’s effort to tame inflation. “Price hike is highly unlikely. Although input cost has gone up, there is competitive pressure. There has been some decreases, for example, in steel prices, but it is still very high compared to the last year,” Maruti Suzuki chief general manager (marketing) Shashank Srivastava said.
Though recently commodity prices have slumped as per industry estimates, prices of major raw materials like steel, aluminium and copper have gone up by nearly 20% in the last one year. Prices of metals plummeted early 2009 reflecting the global financial crisis but started heading north on fast recovery in the world economy.
“Generally, a 20-25% increase in steel and aluminium prices reduces automakers’ operating margin by 150 to 200 basis points,’ Vaishali Jajoo, auto analyst at Angel Broking, said.
The country’s second largest passenger car manufacturer, Hyundai Motor India Ltd (HMIL), would absorb the input cost burden in the short run. “There have already been three hikes this year. While in January, car companies increased price to cover input costs, the other two hikes came on account of increase in excise duty an change in emission norms. We do not see any further hike in near future in spite of input cost pressure,” HMIL director (sales and marketing) Arvind Saxena said.
Some of the carmakers recently hinted price hike arguing the raw material prices had gone up. Ford India executive director (marketing, sales and services) Nigel Wark last week said there was case for an hike with rising input and distribution cost. An industry watcher said that some companies had brought small cars at launch prices in a bid to establish themselves in the fast expanding compact car market. “The launch price some times even does not cover the cost fully,” he said wishing not to be named.
Auto majors rule out price hike for now
|14th November 2011, 20:21||#2|
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Re: Auto majors rule out price hike - say upward revision in prices could slacken gro
Not so true now :
Maruti hikes diesel car prices by up to 10,000 rupees - The Times of India
No clue if there's more to it than "rising input costs"!
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