Indian auto makers hike prices by Rs 25-40k

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19 December 2016

Automobile companies have geared up the new year with a price hike of over Rs25000 -40000 starting January. Demonetization impact on the automobile sector looks more relaxing than steel as steel mills inspite of announcing a hike in the past 2-3 months have failed to pass onto the increased levels. Can the car companies offer equivalent discount to the buyers? It will be a question to be seen once the sales either pick up or drop in the new year.

Current market participants are unhappy with the increase but car manufacturers are intelligent to bundle offers like zero down payment to get rid of their inventories. Unfortunately, steel mills on the other hand do not have such offering in their kitty.

An intriguing fact to the brought to light is that car companies like Mercedes, BMW, Volkswagen, Toyota and Hyundai which have a very good presence in international markets like USA, Europe and Middle East have not announced any hike in prices at par to their rise announced in India.

China recently announced to increase sales tax to 7.5% on small cars from the current 5% from January and the steel price in the country are also going up by average $35 per tonne. Are their car prices rising on the same lines?

Japanese market, Toyota is yet to fix a price hike but in India the hike is already announced. Surprisingly, coking coal contract up by $80 per tonne was fixed about 2 week back but the automobile company didn’t decide on any hike yet.

It is hard to see if steel would get a share of the price hike announced by auto sector in the coming month, until then, ‘good luck’ to steel.