Most carmakers, including Maruti Suzuki, have increased prices several times this year.
With the lifting of COVID-19 restrictions in most parts of the country, economic activity is once again gaining momentum. Car sales have picked up in recent months, registering strong growth. With the onset of the festive season, the situation is expected to get better. Earlier, India’s largest carmaker Maruti Suzuki has announced plans to increase prices across its range in September.
The prices of all Maruti cars available for sale at Arena outlets (Alto, WagonR, Swift, DZire, Celerio, Ertiga, S-Presso, Brezza, EECO and all Tour models) will be increased. The prices of Maruti cars for sale at Nexa outlets (Baleno, Ciaz, XL6, Ignis and S-Cross) will also be increased. The new September 2021 price list of all Maruti cars will be revealed soon.
rising input cost
In regulatory filings submitted to the NSE and BSE, Maruti has said cost increases in the past one year. To maintain normal business operations, the company is left with no option but to increase the prices. While Maruti will try to absorb the rising cost as much as possible, part of it will have to be passed on to the customers. As per the plans, the price hike will be announced in September 2021.
One of the major reasons for the increase in input costs is the disruption caused by the pandemic. Component manufacturers and the global supply chain ecosystem have been adversely impacted by COVID-19. There is a global shortage of semiconductors, forcing auto companies to pay more to keep production lines running.
Another reason for the hike in prices is stricter emission norms like BS6 and Euro 5. Many countries around the world have recently adopted new emission norms. To comply with these new standards, catalytic converters are being installed in automobiles. These are quite expensive, as they use precious metals like platinum, palladium and rhodium. As global demand increases, the price of these precious metals continues to rise.
Not every customer is affected by the price hike, as is evident from the increasing car sales in recent months. However, those with a limited budget certainly feel the pinch. Options can range from buying a used car or going for a more affordable option.
Rising fuel prices have been another pain point for consumers in recent months. Many users can be seen converting their cars to CNG. The demand for new CNG cars is also increasing. Considering these developments, Maruti will launch CNG variants of Brezza, DZire and Swift. Maruti’s current range of factory fitted CNG cars includes S-Presso, Celerio, WagonR, Alto, Eeco and Ertiga.
Maruti’s third price hike
About this latest price hike, Maruti had informed the stock exchanges earlier this year in June as well. At that time, the company had said that the prices would be revised sometime in Q2 FY22 (Q3 2021). However, throughout July and August, the company decided not to increase the prices. It is now clear that Maruti’s third price hike this year will be announced in September.
Maruti’s first price hike this year was in January. At that time the price was increased from Rs 5,061 to Rs 34,000. The second price hike was in April when the prices of select variants were increased by an average of 1.6%.