Car makers are planning to increase costs for the third time in this year 2014, notwithstanding a drowsy business sector and late cut in extract obligation, as is commonly said expanding working expenses and unstable money are crushing their edges.
Mahindra & Mahindra, Tata Motors, Honda Cars India and Renault India are slated to raise costs from one month from now, while others, for example, Maruti Suzuki, Hyundai Motor India and Ford India are thinking about a comparable move, company authorities and industry sources said. "As we enter into a new fiscal year, we are closely looking at the cost pressures," Mayank Pareek, chief operating officer for marketing and sales at Maruti.
"We have witnessed a sharp increase in operating costs," said Mahindra & Mahindra CEO for automotive division Pravin Shah. "There is huge pressure on margins." He said the company will have to factor in inflationary pressures from commodities and logistics before it decides on the quantum of the rise. Hyundai Motor India has "a considered view to go in for a hike as a number of factors are affecting our profitability", said Rakesh Srivastava, senior VP of marketing and sales.
"As a multinational carmaker, we are feeling pressures from the high exchange rate due to heavy imports of critical imports," he said, while also citing the excise duty-related compensation to dealers on unsold inventory as another factor putting pressure on it. Honda was the first to announce a price hike, effective April 1. But it has yet to decide by how much. "We are working out the quantum of the price hike. It will be decided by the end of this fiscal year," Jnaneswar Sen, senior VP for marketing and sales, said.