India’s largest carmaker Maruti Suzuki announced on Monday that it is increasing the price for select models due to an increase in various input costs. While the price change will vary across models, the increase is up to Rs. 34,000 (Ex-Showroom - Delhi).
Maruti Suzuki said in a regulatory filing that the new prices came into effect from January 18, 2021. Maruti’s announcement comes a month after it first announced that it will be hiking prices of its vehicles from January 2021.
Maruti said at the time that the price hike was because the cost of its vehicles getting impacted adversely due to increase in various input costs. “Hence, it has become imperative for the company to pass on some impact of the above additional cost to customers through a price increase in January 2021,” the company said in a statement.
For the month of December, the carmaker reported a 20% increase in overall sales compared to the same month in 2019, while its production increased 33.78% to 1,55,127 units.
But according to data from the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales in India slipped to a ten-year low in the April-December. The industry body also said that high levels of uncertainty remain in the industry due to COVID-19 situation and shortage of critical components like semiconductors.
Maruti, however, is not the only automobile major to hike prices. Nearly every automobile company announced a hike in prices from January 2021 due to rising inputs costs.
Hyundai also cited input and material costs and announced that it will be hiking prices of its vehicles. Tata Motors, Mahindra, Ford, Renault were also among other automakers who hiked prices with effect from January 2021.
A shortage in semiconductors in another issue that is currently impacting the automobile industry, not just in India, but across the globe.
Ford India shut down its plants in Chennai and Gujarat due to the global semiconductor shortage, and will resume production from January 24 onwards.
“We pulled ahead a down week at Chennai Plant to this week as a global semiconductor shortage disrupted part supplies from our vendors. We will resume production at the Chennai plant next week,” Ford India said in a statement.
Last month, due to the semiconductor shortage issue supplied by Bosch Ltd, Mahindra & Mahindra also said that it expects a reduction in production and sales volume at its automotive division.
Apart from Ford, Nissan, Volkswagen, Fiat Chrysler and Toyota have also curtailed production globally due to the same reason, delaying the production of some vehicles.