Rising input costs, especially that of the raw materials have been a leading reason why the profit margins of auto companies have dropped. To boost that up they need to increase the prices of their products or that is what they tell us!
While the auto sector in India is recovering from its worst yet slowdown, the festive season has also not been upto expectations for many manufacturers, including Mahindra.
To offset the rising prices, companies are planning to hike prices of their vehicles. The first to take the lead in raising prices of its vehicles is home-grown Mahindra. The company has, in an official communication, informed that they have increased prices of their products both in the passenger vehicle sector as well as the commercial sector.
As per the company, this rise has been long overdue and will temporarily reduce the impact caused by the rising input costs. Effective immediately, the prices have been raised by Rs 2,300 to Rs 11,500, depending on the model as well as the variant. The rise has been kept marginal, approximately 1 per cent over their existing ex-showroom prices, so that the burden on consumers is not huge.
The company has also announced a raise in the prices of its tractors, which will see an increase in the range of Rs 6,000 to Rs 10,000.
Following Mahindra could be India’s largest car-manufacturer Maruti Suzuki which may announce a price hike soon. Other may follow as well.