Maruti Suzuki to hike prices across models from April, says raw material getting expensive

• Follow

Consumers have to pay a little extra from April 2021 to drive their favourite Maruti model home. The country’s largest carmaker Maruti Suzuki India on March 22 said it will increase prices across its model range from next month in order to offset the impact of high input costs. On January 18 this year, the automaker had announced to hike prices of select models by up to Rs 34,000 due to a rise in input costs.

“Over the past year, the cost of the company’s vehicles has been impacted adversely due to an increase in various input costs, Hence, it has become imperative for the company to pass on some impact of the above additional cost to customers through a price increase in April 2021,”  the company said in a regulatory filing.

The company had posted a double digit growth for February 2021 which means the demand outlook is positive despite the rising concerns over the supply side. Maruti Suzuki posted a growth of 11.8% at 1,64,649 units in Feb 2021. The carmaker reported an 18.9% year-on-year growth in the SUV segment; it sold 26,884 units of SUVs like Vitara Brezza, S-Cross, Ertiga, and XL-6 last month as compared to 22,604 units in the same period last year.

Over a telephonic conversation with Money9,  Shashank Srivastava Executive Director – Marketing & Sales at Maruti Suzuki India Ltd said, “In the past two years Maruti did not increase its prices due to change in BS4 to BS6 norms and last year due to the pandemic. But, in the last few months, there has been a huge increase in the raw material costs. Prices of precious metals like palladium, rhodium which are used in catalysers have also increased. So, partly we increased the prices in January by 1.3%.”

“Now the indication is that those raw material costs in the next few quarters will continue to be high. And as a result, we are forced to increase prices in April. We will increase the prices across all models. Since we are still calculating..I will not will able to give you the exact quantum of increase. But it would be substantial, because the input costs have gone up dramatically,’’  he further added.

Regarding the shift in demand, Srivastava also mentioned, ‘’we have to walk the very fine line between top line and bottom line. In other words, we have to look at the demand situation keeping a balance as we cannot pass all increased cost to the consumers.’’

However, its entry-level vehicles and flagship sedan’s sales took a fall last month. The carmaker sold 23,959 units of Alto 800 and S-Cross last month as compared to 27,499 units in February 2020, marking a 12.9% decline. And as for Ciaz, its sales declined 40.6%, from 2,544 units in February 2020 to 1,510 units last month.

The announcement was made after market hours. Maruti Suzuki shares ended flat today at Rs 7,103. Maruti sells a range of models from entry-level hatchback to S-CROSS crossover, priced Rs 2.99 and Rs 12.39 (ex-showroom prices Delhi).