Auto companies in India announce price hike from Jan 2013, to clear 2012 car stock

Festive season failed to pick up car sales and meet expectations which have resulted in piling stocks. To ensure clearance of these stocks, auto companies…

Festive season failed to pick up car sales and meet expectations which have resulted in piling stocks. To ensure clearance of these stocks, auto companies in India such as Maruti Suzuki, Hyundai Motors, Honda, General Motors and Volkswagen are threatening price hikes from 2013 in a hope that it will draw customers back to showrooms this month, which in turn will lead to liquidity of stocks.

Citing rising pressure on margins, currency fluctuations and higher input costs these auto companies are talking of price hikes, however on the other side of the coin are offering attractive discounts on all models specially where their slower moving petrol variants are concerned.

Maruti Suzuki is offering discounts between Rs.20,000 to Rs.25,000 on Estilo, Ritz, WagonR and SX4 while Hyundai Motors is also offering discounts to the tune of Rs.50,000 some of their petrol models while the same is true with other auto companies who are offering discounts to entice customers who otherwise shy away from making new car purchases especially at the end of the year.

Auto companies generally increase prices during January while offering attractive discounts at the end of the year. General Motors, which faced slowdown in sales stated that they would be increasing prices from January across their range from 1-3% while Volkswagen Group is also considering price hikes though they have not specified to what extent. However, these can only be looked at as threats to get rid of stocks which have been piling up at company showrooms due to higher interest rates and economic slowdown which has kept buyers away during the past year.

Source: ET