Maruti Suzuki cars might soon become costlier in India
What's the story
India's leading car manufacturer, Maruti Suzuki, has hinted at a possible price hike for its vehicles. The company said the ongoing conflict in West Asia has increased commodity prices, negating the benefits of last year's consumption tax cuts. The Iran war has led to a spike in costs of oil, gas and metals used in vehicle manufacturing.
Market response
Price hike could impact demand for small cars
Maruti Suzuki's sales chief Partho Banerjee said during a monthly sales call that the company is considering a price hike due to rising commodity prices. "We will be taking a call, but unfortunately the commodity prices are going very high, we need to pass it on," he told reporters. This potential increase could impact the demand for Maruti's small cars after India's major tax cuts in September attracted price-sensitive customers back to dealerships.
Sales trends
Maruti's sales surged by 10% in March
Despite a 5.8% drop in domestic sales between April and September, Maruti Suzuki saw a 12% jump between October and March. The demand for small cars outpaced supply, with delivery wait times extending to a month. Today, the company reported a 10% YoY rise in domestic sales to dealers during March and a whopping 43% increase in exports.
Export impact
Hyundai reported a drop in overseas shipments
The ongoing West Asia conflict could delay shipments to the region, which accounts for 12.5% of Maruti's annual export volume, said Rahul Bharti, senior executive officer for corporate affairs. Hyundai Motor India has also reported a 10% drop in its overseas shipments in March. The firm posted a 6% rise in domestic sales during the same period.