Looking To Buy Car? Get Ready To Spend More As Automakers Plan To Hike Prices Next Year

Mercedes-Benz, Audi, Maruti Suzuki, Renault, Kia India, and MG Motor announced plans to raise vehicle prices from January next year to offset the impact of rising input costs

The automakers join market leaders, Maruti Suzuki India and Tata Motors, in making year-end price increases effective next month.

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Are you looking to own a new car next year? Then you need to spend more as top auto companies are aiming to raise vehicle prices. Mercedes-Benz, Audi, Renault, Kia India, and MG Motor announced plans to raise vehicle prices from January next year to offset the impact of rising input costs, according to the news agency PTI. The automakers join market leaders, Maruti Suzuki India and Tata Motors, in making year-end price increases effective next month.

What’s the expected price hike?

Audi India announced a 1.7 per cent price increase across the board, while Mercedes-Benz India plans a 5 per cent price rise starting in January. Meanwhile, Kia India said the quantum of price increase would be up to Rs 50,000, depending upon model and trim, according to the report. Renault didn't disclose the magnitude of the price increase it intends to implement beginning next month. MG Motor India aims to increase prices soon ranging between two-three per cent depending on models and variants.

"The primary objective of the company's business strategy focuses on a model that begets profitability and sustainability. The price correction is affected as a result of the rising supply-chain-related input and operational costs," the report quoted Audi India Head Balbir Singh Dhillon as saying. The new price range for the company models is aimed at maintaining the premium price positioning of the brand, ensuring sustainable growth of both the automaker and its dealer partners, he added. Audi India's current line-up includes the petrol-powered A4, A6, A8 L, Q3, Q5, Q7, Q8, S5 Sportback, RS 5 Sportback, and RSQ8. Its electric vehicle (EV) portfolio under the e-Tron brand comprises the e-Tron 50, e-Tron 55, e-Tron Sportback 55, e-Tron GT and RS e-Tron GT.

What's the reason behind the price rise?

The constant increase in input costs and increased logistics costs have been exerting significant pressure on the overall operational costs of the company, noted Mercedes-Benz India.  

This has prompted the automaker to upwardly revise the ex-showroom price of its model range, enabling a sustainable and profitable business, it said.

"To run a sustainable and profitable business for us and our franchise partners, a price correction is necessitated to offset the rising inflationary cost pressures," he added.

Renault India said: "Reasons for the price hike are to partially offset the impact of constant increases in input costs largely driven by pricier commodities, fluctuations in foreign exchange rates, inflation and also due to regulatory obligations."  It, however, did not disclose the quantum of its impending price hike.

Jato Dynamics India President and Director Ravi Bhatia noted that the increase in commodity prices coupled with supply chain issues faced by the manufacturers, in addition to new technologies and features in automobiles and meeting regulatory requirements have pushed up the cost. Hyundai Motor India, and Honda Cars said they have not yet taken a call on the matter.