Auto Firms Mull Price Hike Due To Soaring Steel Rates
This second round of price hike will take place in the March-April period.
Auto firms in India are mulling another price hike, the second this year, so as to neutralise the pinch of increasing raw material costs.
Vehicle manufacturers are indicating a price increase to the tune of 1-3 percent as domestic steel manufacturers increased prices twice for forging quality steel and 3 times for other types of steel in the third quarter this fiscal.
Ashok Leyland, Eicher Motors and Mahindra, have all revealed that they will announce another round of price hikes soon.
MD of Eicher Motors, Siddhartha Lal has announced that the firm will probably increase prices for both its commercial vehicles and premium Royal Enfield motorcycles again in April. Mahindra, on the other hand, will increase prices in the first quarter of next fiscal year.
At the beginning of this year, automakers increased the asking price of their vehicles citing rising input costs. Country’s top automaker Maruti Suzuki hiked prices of its products by up to Rs. 34,000/-, while Hyundai raised costs by up to Rs. 45,000/-.
While Mahindra’s price hike was to the tune of Rs. 42,000/- and the third largest passenger vehicle manufacturer, Tata Motors’ cost increase was up to Rs. 26,000/-. Many firms, like Ashok Leyland, hope that the market will absorb the price increase that will be brought about.
While the auto price hike is due to increase in raw material cost, what worries automakers more is the difference in demand and supply as the impact of COVID-19 and government mandated lockdowns can still be felt.
Price hike aside, the semiconductor shortage is another issue that automakers are trying to cope with. The situation though, is expected to normalise by June-July.
Source – TimesofIndia.IndiaTimes.com