Earlier this month, Tata Motors had announced that it plans to increase prices across its passenger vehicle line-up. However, the company didn't reveal the timeline or the quantum of the hike then. According to a report from PTI, the home-grown carmaker will increase the prices of its passenger vehicles in India from next week. Through this price increment, the company aims to offset the steep rise in procurement costs of essential materials like steel and precious metals. This will be the third price hike by the Indian carmaker this year.
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The company is currently in the process of working out the details of the increase in each model / trim.
Shailesh Chandra, President - Passenger Vehicles Business Unit, Tata Motors said to PTI, "We have seen a very steep increase in the prices of steel and precious metals over the last one year. The financial impact of the increase in commodity prices is in the range of 8-8.5 per cent of our revenues in the past one year."
The automaker had previously increased prices in May 2021 by up to 1.8 per cent. Prices of cars were also hiked by up to Rs. 26,000 in January this year. The carmaker sells a range of passenger vehicles such as Tiago, Tigor, Nexon, Harrier and Safari in the Indian market.
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He also said, "From the company realisation perspective, we have passed on only 2.5 per cent. From an ex-showroom perspective, this would be around 3 per cent, so there is a big gap to the extent of increase that has happened (in the input costs) and what we have been able to pass on to the market. But with the gap still remaining and the prices of essential commodities remaining high, we are now forced to take a price hike from next week."
He further noted that the company has been able to mitigate some of the impacts of rising input costs by running various cost reduction initiatives, as it wanted to avoid passing on a big quantum of price hike to customers. However, he added that the carmaker is presently in the process of working out the details of the increase in each model/trim.
This will be the brand's third price increase this year.
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Maruti Suzuki India recently increased the prices of Swift and all CNG models by up to Rs. 15,000 due to rising input costs. Honda Car India also announced to increase car prices from next month, as it looks to offset the impact of an increase in commodity rates. Similarly, Toyota India will also be increasing prices of the Innova Crysta MPV from August 1, 2021, due to a substantial increase in input costs.
