Maruti forced to increase the price of its cars
Maruti Suzuki India, the Indian auto market czars announced on Thursday, that the company intends to increase the price of its cars in January due to the higher raw material cost and yen at a stronger position. For the third time Maruti is increasing the price of its cars in the 2010 for the financial year starting from 1st April. The auto manufacturers are experiencing price hike in components such as aluminum and steel.
Maruti Suzuki India, the Indian auto market czars announced on Thursday, that the company intends to increase the price of its cars in January due to the higher raw material cost and yen at a stronger position.
For the third time Maruti is increasing the price of its cars in the 2010 for the financial year starting from 1st April. The auto manufacturers are experiencing price hike in components such as aluminum and steel. The competition in market is intense which is why, Maruti did not increase the prices earlier but now the profits are minimizing on its cars.
Mayank Pareek, Managing Executive Officer for Marketing and Sales, Maruti India, said that, the company was incurring the cost pressure for a while but now the profits are shrinking which is forcing the company to increase the price of its cars. He added that, the company management has yet to decide on the price hike. The price of natural rubber to steel almost everything is costlier. From last year Steel prices has increased by 15 per cent, rubber by 100 per cent and copper by 12 to 15 per cent.
Another major factor for the hike in price of its car is that imports are getting expensive because yen is at a stronger position, 82-83 compared with the US dollars.
Mr Pareek, said that, the company's import from its Japanese partners Suzuki does not effect much. The vendors are majorly dependent on imports which is putting cost pressure on the company. He continued and said that the company has shown a great leap on the sale of its vehicles. It expects to sell almost 100,000 units every month because of the high demand. In the Indian auto market, the company had sold 75,000 units last year in a month and now it is 100,000 units every month. The company is looking for higher scales graph. He also told that, Maruti Suzuki has order backlog of almost 98,000 cars.
The company sold 1,12,554 units in November and increased the sales graph by 28 per cent. The domestic auto market sales rose by 34 per cent by selling 1,02,503 units. From April-November, 2010 the sale climbed to 28 per cent by selling 828,440 units.
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