Weakening Indian rupee may Compel Automakers to hike Car Prices

The Indian rupee slumped to another record low of 59.93 against the dollar yesterday, after the US Federal Reserve signalled to tighten monetary policy after around five years of stimulus spending, began after the 2008 financial crisis. And if the rupee value keeps getting depreciated, this may force automobile companies to increase prices of their vehicles. Toyota and General Motors have already said that they are keeping options open to enhance prices of their products sold in the country.

Commenting on the same, Sandeep Singh, Deputy Managing Director and COO (Marketing and Commercial), Toyota Kirloskar Motors (TKM) said, "We will wait and watch for some time and will review our car prices at the end of the month. If this slide continues, we will be forced to increase the prices." He further said that downfall in rupee value will have an adverse effect on 50 percent of the parts that TKM imports.

GM India that had hiked prices in the first week of June, had no plans to further hike the prices immediately, "But we will keep evaluating impact and review again," said P Balendran, VP- General Motors India.

Honda Cars India said that they have recently hiked the prices of all its models, so they will wait before taking any further hike. "Currently, we are trying to hold the prices and will wait and watch before taking any further hike," a company spokesperson said.

India's largest carmaker Maruti Suzuki India officials said that the company hasn't yet decided on hiking the prices of their cars. While a Hyundai spokesperson said that the company is not considering any price hike as of now, due to the current slow down in the auto industry.

Source: PTI