Hyundai Motors India, Toyota Kirloskar Motors(TKM), Tata Motors, Nisaan and Datsun have set forth a price hike to come in effect from this new year onwards.
Owing to a drop in sales since 2014. The sales remained slow even in 2016 as Arun Jaitley, Finance Minister, proposed a 4% increase in cess tax on passenger vehicles in Union Budget 2016-17 in February.
When the industry speculated to make profits during the festive season, demonetization in November squeezed the demand, making products move out of dealership at a slower than normal pace. Major 'production cuts' and 'plant shut downs' were planned by major motor works of India like Mahindra and Mahindra, Hyundai, Ford, Renault-Nissan etc. in order to deal with the wobbling market scenarios.
Pravin Shah, President of Mahindra and Mahindra said that the measure has "dampened overall sentiments" and will lead to "postponed buying" thereby resulting in "major drop in volume during November". To combat with the situation of monetary crunch post demonetization, many companies have begun accepting payments via Paytm and other e-wallets. This has provided an easier method for the customers to buy a car devoid of hard cash.
With the onset of the coming new year, many companies have made public a substantial price hike, as is accustomed. Hyundai Motors India has announced a jaw-dropping increase of Rs. 1 lakh across all its segments from January onwards. Rakesh Srivastava, senior vice president, sales and marketing of Hyundai Motor India recently said that “In these challenging year-end market conditions, we are constrained to consider a price increase of up to Rs 1 lakh across all models, from Eon to Santa Fe.”
This is followed by TKM hiking prices up to 3% on selected models. "There has been an increase in pricing of raw material commodities like steel, aluminum, copper and rubber over a period of the last six months and this puts a lot of pressure on us as all this has been leading to a higher input cost on our end," Toyota Kirloskar Motor Director and Senior Vice President (Marketing and Sales) N Raja said in a statement.
Nissan and Datsun have also joined the league by announcing an increment of Rs. 30,000 from January'17 reason being the rising investments in purchasing raw materials and coming on terms with the losses of the year as a whole. Tata Motors have also ranged their price hike from Rs.5,000-25,000 depending upon the models from 1st January'17.
Although price hikes at the beginning of a new year are run-of-the-mill, but considering the circumstances of demonetisation and already dilatory sales post a long and rough period of uncertainty since 2014, it might result in the decline of demands and the aim of becoming third largest auto manufacturing country till 2020 seems far-fetched.
