Indian car buyers should brace for potential price increases as major automakers, including Hyundai Motor India Ltd and Maruti Suzuki India Ltd, indicate plans to raise vehicle costs. The companies cite stubbornly high input costs for commodities like steel and copper, which are impacting profitability despite strong sales volumes.
Hyundai Considers Pre-January Hike
Hyundai Motor India is closely monitoring commodity prices and may implement a price hike before January 2027 if cost pressures persist. The company has already absorbed a significant portion of rising input costs, hoping for an easing of commodity prices as geopolitical tensions subside. However, this relief has not materialized, leading to a sequential impact of approximately 250 basis points on costs.
“We are just watching it very closely, and sooner or later, if these things remain the same, we will definitely have a price increase,” stated Tarun Garg, Managing Director and CEO of Hyundai Motor India. “In any case, in January, we will take the price increase. So we will see if there’s a need to take a price increase before that. As of now, we will try to restrain.”
Garg also noted that Hyundai is maintaining pricing discipline by keeping discounts in check, with discounts declining from 3.2% to 2.9%. Newly launched models, currently offered without discounts, are helping to offset promotional activities on other vehicles in their portfolio.
Maruti Suzuki Plans Further Increases
Meanwhile, Maruti Suzuki India has already raised vehicle prices three times this year and is planning further increases over the next six months. Hisashi Takeuchi, Managing Director and CEO of Maruti Suzuki, confirmed the ongoing challenges posed by commodity cost headwinds.
“We are doing everything possible to mitigate the impact of price increase. We have already increased prices three times,” Takeuchi said, emphasizing the necessity of additional adjustments to manage rising input expenditures.
Profitability Under Pressure Despite Sales
Both automakers are facing challenges to their profit margins. Even with record sales and volumes, the profitability of Maruti Suzuki and Hyundai Motor has seen a decline. Companies are exploring various strategies, including internal cost efficiencies and tighter expenditure controls, to protect their bottom lines.
The timing and magnitude of these upcoming car price hikes will ultimately depend on the continued evolution of global commodity markets and the automakers' ability to absorb or pass on these costs.