Wednesday, May 25, 2022

Cars set to get costlier in 2021

By Sruti Venugopal

Published: Published Date - 12:06 AM, Sat - 26 December 20

In order to accommodate the rising commodity prices and input cost, major carmakers have announced a price hike in the range of 3-6 per cent

Hyderabad: If you are planning to buy the car of your dreams, it is better to get it booked before December 31 or be prepared to shell out more if you plan to buy next year.

All major automakers like Maruti Suzuki, Hyundai, Kia Motors, Mahindra and Mahindra, Renault, Honda, and Nissan India among others have announced a hike in their car prices starting January 2021. Most of the companies have cited reasons like rising commodity prices, input costs, and fluctuating exchange rates.

“In the current challenging market conditions, we are constrained to increase the price of all Nissan and Datsun models due to increased costs. The proposed price increase will be effective from January 2021,” said Nissan Motor India, MD, Rakesh Srivastava while announcing a price hike of up to 5 per cent across its models.

“The hike in price is expected as manufacturers are facing high input cost, logistic challenges, supply chain bottlenecks in the post-Covid conditions, which are still to be neutralised,” said Vinkesh Gulati, president, Federation of Automobile Dealers Association.

Not just the budget, even luxury car companies like BMW announced that it will be increasing its prices by up to 2 per cent on its model range and the new rates will be effective from January 4, 2021. “This is an annual affair and automakers are forced to hike the prices in the range of 3-6 per cent every year owing to various external factors. For the luxury segment we are seeing zero stock availability as the production was low this year,” said Yashwant Jhabakh, MD, Mahavir Motors.

However, many industry experts suggest this price may act as a deterrent and may put brakes on vehicle sales in an industry that has already gone through a challenging year. According to reports by Society of Indian Automobile Manufacturers, passenger vehicle sales saw a decline of 22 per cent during the April-November.

Gulati added the price hike will act as a deterrent and may affect sales which were showing a growth since unlock began. “January-February-March will be a challenging quarter. With the economy slowly returning to normalcy, we should witness some stability and revival in the auto sector too,” he said.