Mahindra and GM hike car prices
Car manufacturers in India have started raising prices despite sluggish demand and negative sales, as rising input costs due to the falling rupee threaten margins.
While utility vehicle maker Mahindra& Mahindra has increased prices by up to Rs 6,000 on most models, General Motors' local unit has hiked the price of its newly launched Enjoy multi-utility vehicle by Rs 10,000.
Other manufacturers, including Maruti Suzuki, Hyundai Motor, Toyota Kirloskar Motors, Audi India and Mercedes Benz, say they may follow suit but will wait for market conditions to improve before doing so.
"The impact coming from the weaker rupee had made imports for our vendors costly, which forced us to hike prices even as our sales declined by 13% last month," said Pravin Shah, Mahindra's automotive division chief executive. The automaker has raised prices of all its utility vehicles, except the XUV 500 and the SsangYong Rexton, by up to Rs 6,000.
Most Indian automakers source critical parts and components from overseas markets. The tumbling rupee, which breached the Rs 60/dollar mark on Wednesday, is forcing them to increase prices in order to offset the impact and compensate their suppliers.