Builders Predict Price Rise Due to Rising Input Costs


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New Delhi: Several automakers have decided to increase the prices of certain models from January 2022 due to rising input costs.

Citing rising input costs, automotive major Maruti Suzuki India said it would increase prices for some models from January 2022.

“Over the past year, the cost of the company’s vehicles continued to be negatively affected due to the increase in various input costs,” the company said.

“As a result, it has become imperative for the company to pass on some of the additional cost impacts to customers through higher prices. The increase will vary by model. On average, the cost of materials represents 70% of our overall cost. structure, ”he added.

According to Vinod Nair, research manager at Geojit Financial Services: “It is becoming imperative for the company to pass some impact on to customers through an increase in prices. We expect demand to gradually pick up by the fourth quarter due to lower raw material costs and fewer semiconductor shortages. “

Likewise, luxury automaker Audi has said it will increase prices by up to 3% for all models, citing rising entry and operating costs.

“To compensate for the increase in supply and operating costs, a price correction is necessary. The new price range of our selected vehicles will ensure the premium price positioning of the brand, thus ensuring sustainable growth for both the brand and our dealer partners ”, said Balbir Singh Dhillon, Director of Audi India.

In view of the increase in input costs, Mercedes-Benz will also increase the ex-showroom price of its selected models by up to 2%, effective January 1, 2022.

“In line with the continued increase in input costs driven by steel, aluminum, etc., automakers are raising vehicle prices to maintain profitability,” said Ashwin Patil, senior research analyst at LKP Securities .

“This decision will not have a significant impact on demand as customers wait for production to normalize as the availability of semiconductor chips haunts the industry,” Patil added.

Buyers could ignore the price hike and demand will strengthen, Patil added.

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