The carmakers of India has announced to hike the car prices for the third times this year ranging from Rs. 5000 to Rs.20,000 on the back of skyrocketing prices of raw materials as per carmakers confounded for hiking the prices. They have also blamed the excise duty increment, which government had imposed on big and Sports Utility Vehicles (SUVs) behind this price rise.
The various car manufactures on Monday has announced to hike the prices of cars by up to Rs.5,000 for mid-segments cars and up-to Rs.12,000 for the big and luxurious cars and SUVs.
Justifying the decision of price rise, the carmakers have argued that the raw input material of the cars have been surged to over 30% while the selling prices of cars have been hiked only 3-4% in this year. ‘The government has also rose the excise duty on mid and big cars by Rs.5,000 to Rs.20,000 per vehicle, so we (carmakers) have no choice but to hike the selling prices,’ as said by a carmaker.
They have argued that the prime material of cars, Steel has become costlier to Rs. 13,000 per tonne while chrome-moly steel has gone up to Rs.3,200 per tonne, type became expensive by Rs.2,000 per vehicle, plastics by Rs. 1,800 per tonne in the second quarter of April-June as against first quarter of January-March.
The major increase in input costs is coming from steel, which is up by Rs 13,000 per tonne, chrome-moly steel is up by Rs 3,200 per tonne, tyres have gone up by Rs 2,000 per vehicle, and plastics are up by Rs 1,800 per tonne in the second quarter of April-June over the January-March period. The prices of other materials like nickel, aluminum, copper and glass have also become extremely costlier since last two years.
So, to balance the margins and massive loss, the car manufactures have decided to pass a portion of price rise to consumers, as per carmakers argued.
Earlier, the carmakers have hiked the prices two times – 3% in January and 4% in May-June this year.
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