Maruti Suzuki to hike prices across models from April
India's largest passenger carmaker Maruti Suzuki Ltd has decided to again hike the prices of its cars across the model range from April 2023. This is the second consecutive hike in prices this year after January when Maruti increased prices by 1.1%. The Maruti Suzuki stock is trading 1.23% up at ₹8,354.5 on the NSE today.
The price hikes are being implemented in the wake of overall inflation and regulatory requirements related to Bharat Stage 6 regulations, says Maruti Suzuki.
"The company continues to witness increased cost pressure driven by overall inflation and regulatory requirements. While the company makes the maximum effort to reduce cost and partially offset the increase, it has become imperative to pass on some of the impacts through a price increase. The Company has planned this price increase in April 2023 which shall vary across models," says Maruti Suzuki in an exchange filing.
Notably, some of the biggest auto companies like Tata Motors Ltd and Hero MotoCorp Ltd have already announced price hikes across models from April 2023. The two-wheeler manufacturer Hero said the company will be increasing the price of "select scooters and motorcycles" by around 2% to offset the cost increase on account of the OBD 2 transition. This is the second time in four months that the country’s largest two-wheeler company has hiked prices.
Tata Motors also announced that the company will hike the price of automobiles by up to 5% to comply with the move to more stringent BS6 Phase II emission norms. The price increase will be applied across the entire range of commercial vehicles, with the exact amount varying according to the individual model and variant. This is the second time in two months that Tata Motors has hiked the prices.
Despite frequent hikes in car prices, domestic auto companies recorded a surge in PV sales in February. Maruti Suzuki sold 1,72,321 units in February 2023, including 1,47,467 units sold in the domestic market. Its domestic PV sales were up 9.1% on a year-on-year basis as compared to 1,33,948 units sold during the same period last year.
The auto giant's consolidated profit surged 129.55% in the October-December quarter to ₹2,391 crore as compared to ₹1,041.8 crore in the year-ago period. The revenue in Q3 FY23 from operations surged 24.96% to ₹29,057.5 crore as compared to ₹23,253.3 crore in the year-ago period.
India's automotive industry is expected to grow at high single-digit levels in the financial year 2023-24, according to ICRA. The domestic automotive industry has seen a healthy revival in FY23, aided by a recovery in economic activities and increased mobility, ICRA says. However, the two-wheeler industry continues struggling, with industry volumes below the pre-Covid peak levels.