Srinagar, Dec 21: If you plan to buy a new car in the New Year, the sticker price may set you off by 1-3 percent more than what you would pay until December 31.
Carmakers from Maruti Suzuki, Hyundai, and Tata Motors to luxury brands Audi and Mercedes-Benz have announced plans to increase prices across their offerings starting next month to partially offset the impact of rising costs.
They had said earlier that costs would increase through 2022 amid a shortage of semiconductors, among other factors.
Prices are going up as car sales in India revive after disruptions caused by COVID-19 and shortages of components including semiconductors.
Companies are expanding vehicle production capacities and Maruti Suzuki is building a new factory in Haryana.
Market leader Maruti Suzuki, which makes Baleno, Celerio, Dzire, Ignis, Swift, and WagonR cars, said the price increases will differ based on the model.
“The company continues to witness increased cost pressure driven by overall inflation and recent regulatory requirements. While the company makes the maximum effort to reduce costs and partially offset the increase, it has become imperative to pass on some of the impacts through a price increase,” Maruti Suzuki said in a stock exchange filing on December 2.
Hyundai Motor India said new prices for its i10 Nios, Creta, Venue, Verna, and Tucson models, will come into effect in January.
“The company has continued to absorb rising costs, however (it) will now pass on a part of the input cost increase through a revision in prices across its model range,” Hyundai Motor India said in a statement. Hyundai said it will continue to try and minimise the price impact.
Tata Motors said it is looking to increase prices of its passenger vehicles such as Nexon, Punch, Tiago and Altroz from next month as it starts making them compliant with stricter emission norms that kick in from April.
Mercedes-Benz India said it had absorbed the bulk of higher input costs but was forced to pass on part of the increase to customers.
Kia’s cars including Seltos, Sonnet, Carens, and Carnival will get more expensive by up to Rs 50,000 from January. Honda Cars India will increase the price of its City, Amaze, and City Hybrid by up to Rs 30,000. Jeep’s line-up including Compass and Grand Cherokee may become 2-4 percent more expensive.
Two-wheeler makers are also going in for price revisions. Hero MotoCorp, the largest two-wheeler manufacturer by market share, increased ex-showroom prices of its motorcycles and scooters by as much as Rs 1,500 effective December 1.
“The upward revision of the prices of our motorcycles and scooters has been necessitated due to overall inflationary costs,” said Niranjan Gupta, the chief financial officer of Hero MotoCorp. “The economic indicators are favourable to a growth in demand and we expect industry volumes to pick up.”
Automakers are likely to increase prices again by April as they start producing vehicles compliant with the second phase of Bharat Stage 6 emission norms.
According to Puneet Gupta of S&P Automotive, the quantum of hike is expected to be 1.5 percent for petrol models and up to 3.5 percent for diesel vehicles.
The standards that come into effect on April 1 require onboard diagnostics to be incorporated in vehicles to monitor real-time driving emission levels.
“That will definitely give a price hike,” said Manish Raj Singhania, president of the Federation of Automobile Dealers Associations.
Asked about the extent of the price hike, he said, “It is very unclear at the moment.”
While price revisions are expected for many models when real driving emission (RDE) norms come into effect, many others could be phased out.
Experts reckon that upgrading engines will be expensive, especially for diesel vehicles, and as many as 17 cars and SUVs are likely to be discontinued.
Honda has said it will pull the plug on five cars – City 4th generation, City 5th generation (diesel), Amaze (diesel), Jazz, and WR-V.
Mahindra & Mahindra is expected to halt production of Marrazzo, Alturas G4, and KUV100.
Hyundai will possibly discontinue the i20 and Verna diesel models. Skoda will shut shop on Octavia and Superb.
Tata Altroz (diesel), Renault Kwid 800, Nissan Kicks, and Maruti Suzuki Alto 800 are also likely to be phased out.
