Cars get expensive this festival season as auto makers hike prices

Newspapers are flush with advertisements of discounts and schemes on cars, but those planning to buy a vehicle this festive season might actually have to shell out as much as 5 per cent more.

Most auto makers have already or are planning to increase prices due to a weaker rupee and growing inflation, which have seen input and manufacturing costs rise. Car makers from the West such as Volkswagen, Skoda Auto and Ford, as also Japanese manufacturers Honda and Toyota are among those who have either already increased or will shortly increase the prices of its models .

Maruti Suzuki and Hyundai, however, do not plan to immediately hike prices. "We haven't taken a call, but we are watching the dollar movement," says a Maruti Suzuki spokesperson. "Our CBU imports are very low." He is referring to completely built units or fully built vehicles, as different from component imports, whose value is lower and therefore has less of an impact of a stronger dollar.

Honda which recently launched its entry level sedan Amaze, which sells as between Rs 505,000 and Rs 769,640 depending on the variant, increased prices of the car a month ago. Its petrol SUV, Honda CRV will also become a tad more expensive, but Jnaneswar Sen, Sr. Vice President of Sales & Marketing doesn't think that the sales will get impacted. "So far we are not seeing that impact. This month (September) is better than last month for us."

Toyota has decided to increase prices of the Etios, Etios Liva, Innova and Corolla Altis by up to 1.5 per cent. The entry model of the Etios Liva hatchback used to sell at Rs 446,276 before the recent hike, while the Corolla Altis at Rs 1,569,229 for the top variant. "With the special festive campaigns being conducted across all markets, the sales will not be impacted," says Sandeep Singh, Deputy Managing Director and Chief Operating Officer, Marketing and Commercial at Toyota Kirloskar Motor, the joint venture that makes Toyota vehicles in India.

Skoda's managing director was not available for a comment, but a company official says that price increase of 2 to 3 per cent is expected across all its models. Ford's prices will go up by between 1 to 5 per cent depending on the model. Its sedan, Fiesta, will see very nominal price difference, but the maximum is expected for the EcoSport, the compact SUV which is selling well since it was launched late in June. A price rise of Rs 50,000 is expected on the SUV, whose entry model sells at Rs 559,000.

"Input costs have been consistently increasing and this is expected to continue for the foreseeable future," says Vinay Piparsania, Executive Director for Marketing, Sales and Service at Ford India.

Car sales rose in August for the first time in 10 months. Typically, the annual peak for car sales in India is around Diwali, falling on November 3, but carmakers are keeping their fingers crossed that the price rises will not dent sales this festival season.