As the year draws to a close, major car manufacturers in India, including Honda, Tata Motors, and Mercedes-Benz, have announced plans to increase the prices of their vehicles starting January 2024. This move, driven by rising input costs, rise of EV industry and inflationary pressures, is set to impact a wide range of models across these brands.
Honda Cars India has indicated that the price hike is a necessary step to partially offset the impact of rising input costs. The company, which offers popular models like the Amaze, City, and the recently launched Elevate, is expected to finalize the model-wise increase by the end of December.
In a conversation with PTI, Vice President of Marketing and Sales, Kunal Behl disclosed that the company is forced to raise the prices of its models because of rising input costs. “The model-wise amount of increase will be finalized by the end of this month,” Behl said.
He also emphasized the success of their recently released Elevate model, which attracted a lot of interest from the market despite being priced competitively. But this introductory offer is only going to last until December 23. Prices will likely start to change in January 2024.
This decision aligns with the broader industry trend, as other major players like Maruti Suzuki, Mahindra & Mahindra, and Audi India have also announced similar price hikes citing overall inflation and increased commodity rates.
Tata Motors, known for its extensive range of passenger and electric vehicles, has also confirmed that it will be revising its prices in January. The exact details and extent of the hike are yet to be announced, but it is anticipated to affect both their conventional and electric vehicle line-ups.
A company spokesperson mentioned, “We are considering a price hike across our passenger and electric vehicles in January. The extent of the hike and exact details will be announced in a few weeks.”
Mercedes-Benz India, a leading luxury car manufacturer, is also contemplating a price increase from January 1st. While the specific details of the hike have not been disclosed, it is expected to align with the company’s strategy to maintain its premium positioning in the market. This decision reflects the challenges faced by luxury car makers in balancing operational costs with maintaining a competitive edge in a price-sensitive market like India.
The decision to increase prices is not uncommon in the automotive industry, especially towards the end of the year. Car companies often use this strategy to clear old inventory before the new year and to attract customers with the prospect of impending price hikes. This year, however, the price increases are more a reflection of the broader economic challenges, such as inflation and high commodity prices, rather than just a sales tactic.
The impact of these price hikes will vary across models and brands. For consumers, this could mean shelling out a few thousand rupees more for entry-level models, and significantly more for premium vehicles. The increase is expected to be in the range of 2-3% for most models, although some best-sellers might see a higher jump in prices.
This wave of price hikes comes at a time when the Indian automotive industry is witnessing robust growth in sales, driven by strong demand and a steady recovery post-pandemic. In October 2023, domestic wholesale volumes of passenger vehicles showed a healthy growth, indicating a buoyant market. However, the upcoming price adjustments might pose a new challenge for both manufacturers and consumers as they navigate the changing economic landscape.