Maruti may rise car prices early next year

Country’s leading car manufacturer, Maruti Suzuki might increase the prices of its car models early next year. Does the present situation really demand for a price hike? The debate will go on if we try to reason out on this subject. However, Maruti Suzuki India chief of Marketing and Sales department, Mayank Pareek had pointed out the same. There are definitely a few factors which do not support a price hike on the models. But, the higher input costs give all the more reason to enforce a price hike.The factors influencing negatively are not really unknown. The petrol price hike is one of the reasons, in the past two years petrol price has increased in leaps and bounds, if one ignores the double reduction in the last fortnight.

Indian consumers are obviously not rejoicing over this, leading to an overall slowdown in the car market. The festival season also was unable to lift up the negative mood in the car industry. On top of this, the RBI is behind the back of the Indians revising the interest rates every now and then. As many as 13 lending rate revisions have struck the masses left and right, especially in the past two years. Not to forget the overall economic slowdown. The second quarter of the FY2011-2012 is the worst hit in the past two years dipping 6.9%. Now, Maruti has to consider all the above reasons and think twice before implementing the price hike on its car models. Moreover, the auto major has increased the diesel car prices in India very recently.

Nevertheless, the auto major has to consider its profit margin too. The import costs are the culprit taking away a major chunk of profits it makes from exports. The Japanese car manufacturer has huge stakes in Maruti as much as 54.2%. While the Yen is gaining strength against the rupee, the rupee on the other hand has reached the rock bottom, the lowest in the past 16 years. This impacts the car manufacturers import costs drastically. Why is it so? That’s because, the auto major depends substantially on imports from its Japanese manufacturing unit. The strike at the Maruti's Manesar plant has affected the manufacturer by $ 500 million. So, the the consumers better watch out for the worst and expect a rise in the Martui cars coming year.

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