Maruti Suzuki, Mercedes Benz, Audi To Hike Vehicle Prices From January: Report

Car market leader Maruti Suzuki India along with luxury carmakers Mercedes-Benz and Audi on Thursday said they will increase prices from January to offset rising input and feature enhancement costs. While Maruti said the price rise planned for January 2022 will vary for different models, Mercedes-Benz India said its hike will be on select models by up to up 2 per cent due to feature enhancement and rising input costs.

On the other hand, Audi said its price increase effective January 1, 2022 will be up to 3 per cent across its entire model range owing to rising input and operational costs. "Over the past year, the cost of company's vehicles continue to be adversely impacted due to increase in various input costs.

Therefore, it has become imperative for the company to pass on some impact of the above additional costs to customers through a price hike," MSI said in a regulatory filing. The price rise has been planned for January 2022, and the increase shall vary for different models, it added

In an interaction with PTI, MSI Senior Executive Director (Marketing and Sales) Shashank Srivastava said the company has been forced to take price hikes, with the increase in prices of essential commodities like steel, aluminum, copper, plastic and precious metals over the last one year.

He noted that the automaker has been under pressure since last year but avoided taking big price hikes as it would have impacted the demand scenario in the market. "As we took a big hit in profitability, and with commodity prices remaining high, we were left with no other choice but to take corrective actions. This year we have taken a price increase of 4.9 per cent in total, which is actually lower than the impact we are witnessing on account of high commodity prices," he noted.

For the company, a price increase is the last resort, as it does not like to burden the consumers, Srivastava said. "We were thinking that the prices of commodities would soften, but that did not happen. On our end, we reduced our costs, increased efficiencies, but that was not enough, and eventually, we had to take price hike," he added.

Srivastava said that the company is currently working out the quantum of the hike, which would vary from model to model. "Considering the huge increase in commodity prices, the price hike would be substantial," he noted.

The auto major has already hiked the vehicle prices three times this year -- by 1.4 per cent in January, 1.6 per cent in April and 1.9 per cent in September, taking the total quantum to 4.9 per cent. The company sells a range of models, starting from hatchback Alto to SUV S-Cross, with prices starting from Rs 3.15 lakh to Rs 12.56 lakh, respectively (ex-showroom, Delhi).

Mercedes-Benz noted that in order to offset the costs for feature enhancements amidst rising inputs costs, it will upwardly revise the ex-showroom price of only select models. The price revision ranging up to 2 per cent will be in effect from January 1, 2022, it added.

Similarly, Audi announced a price increase of up to 3 per cent across its entire model range, effective from January 1 next year, owing to a rise in input and operational costs.

"The Audi India strategy focuses on a sustainable business model. To offset rising input and operational costs, a price correction is necessary.

“The new price range of our select vehicles will ensure the brand's premium price positioning thereby, assuring sustainable growth both for the brand and our dealer partners," Audi India Head Balbir Singh Dhillon said in a statement.

Continuing focus on customer centricity, the company has ensured that the impact is as minimal as possible, he added.