Relief for customers; price hike on hold for now

It looks like a relief in storm, as most of the car manufacturers have decided to hold the price hike to avoid any repercussion from auto-market. Recently, manufacturers like Maruti Suzuki, Hyundai and Toyota Kirloskar have announced a price hike starting from April, but to avoid any market fiasco, the automakers have decided to hold back their decision of increasing the prices for the time being. Only Mahindra and Honda have gone ahead with the price hike while Audi India will proliferate its price across the model line-up from the 1st May.

In the month of March, Indian auto-sector witnessed a downfall of 7% when compared to the sales figures of March 2013 while a drop of 5% was witnessed on fiscal year basis. Moreover, manufacturer had recently deduced their car prices in accordance with the excise duty cut. But now due to sluggish economy and continuous depreciating of Indian currency, it became hard for the manufacturer to earn profits. The slow domestic growth is also a major concern for automakers and thus they are trying to lure buyers with attractive discounts rather then to keep them at bay with the price hike.

According to the dealers we spoke, prices will rise in the near future but its not happening as of now. But manufacturers like Mahindra & Mahindra and Honda, who are doing pretty good in past few months have increased the prices by 1 to 1.5%. Furthermore, Honda has increased Rs 10,000 for the petrol variant and Rs 12,000 on the diesel model of its best selling City.

On the announcement of Audi India's price hike which is due from 1st May, Mr. Joe King, Head, Audi India, said, “While Audi has exhibited stellar sales performance in 2013 and in the first quarter of 2014, the overall market scenario has remained challenging with the constant fluctuation in forex rate; thus resulting in a rise in input and operational costs. To address this, we have rationalized prices, but have ensured that the impact is as minimal as possible. Additionally, we continue to offer our customers innovative finance solutions from Audi Finance which will make their purchase more attractive”.