Maruti Suzuki expected to hike up their prices for the third time in 2021
In September, Maruti Suzuki India Limited (MSIL) is expected to raise the pricing of its cars. This is Maruti Suzuki's third price increase this year, and it comes just before the holiday season. Almost all automotive manufacturers boosted their pricing in 2021 to keep pace with the significant rise in commodity costs for metals and precious metals, which are critical inputs in manufacturing.
The business reported a 1.4 percent increase in January, which was followed by a 1.6 percent increase in April. MSIL has not announced the amount of the rise in September, but sources suggest it might be about 3-4 percent, which would be the largest increase yet.
Shashank Srivastava, senior executive director, marketing and sales at MSIL said "the input cost pressure has been piling over the last 15 months. So far, MSIL has not increased its prices proportionately, hoping costs would soften. However, as commodity prices continue to remain high, we are left with no choice but to go for another hike, and this time, it would be substantial hike."
Commodity prices have risen significantly since April 2020, particularly for metals and precious metals needed in manufacturing. Steel prices have climbed from approximately Rs 38,000 per tonne in May 2020 to over Rs 65,000 per tonne today. Even copper prices have nearly doubled from $5,200 per tonne to $10,200 per tonne in the same period. During the same time span, the price of aluminium has grown by roughly 80 percent.
Stricter emission standards, such as BS6 and Euro 5, are another factor for price increases. New emission standards have recently been implemented in a number of nations across the world. Automobiles are being equipped with catalytic converters in order to meet the new criteria. Because they are made of precious metals like platinum, palladium, and rhodium, they are extremely expensive. The price of precious metals such as Rhodium has also risen to $16000 per ounce, up from $1700 per ounce.
Customers are anticipated to contemplate a transition from petrol and diesel vehicles due to increased running costs and an enhanced network of CNG refuelling stations, thus Maruti aims to sell about 3 lakh units of CNG-powered cars in FY 22.
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