Just like other carmakers, Maruti Suzuki has attributed the price hike to increased cost pressure from overall inflation
In compliance with disclosure norms, Maruti Suzuki India Limited (MSIL) has issued a statement regarding upcoming price hike in January 2023. While the overall quantum of price hike has not been revealed, the company has stated that it will vary based on the model.
Maruti continues to experience increased cost pressure on account of inflationary trends. As a fallout of pandemic and adverse geo-political situation, inflation has come to haunt many countries across the globe. While OEMs try to control rising costs and absorb some of it, there comes a point when it becomes imperative to pass some of the burden to end users via a price hike.
Maruti Price Hike Jan 2023 – Upcoming regulatory requirements
Along with high inflation, Maruti price hike is also linked to upcoming regulatory requirements. Carmakers need to prepare in advance to introduce the necessary upgrades, which will involve additional expenses. The focus is primarily on improving safety for passengers. Among the key upgrades will be three-point seatbelts for all front-facing passengers and rear seatbelt reminder. These will become mandatory from April 01, 2023.
Indian government is also looking to implement Bharat NCAP, which will be aligned with global safety standards. It will not be part of minimum regulatory requirements, but still desirable, as there’s increased awareness about safety features. Carmakers would naturally aim for higher Bharat NCAP ratings, as it will be useful in creating positive perceptions about the brand.
From October 2023, a minimum of 6-airbags will also become mandatory for all cars. This was earlier planned to be implemented from October 1st, 2022. However, due to stiff resistance from some carmakers, the 6-airbags rule was postponed for a year. It is unlikely that there will be any further relaxations on this front. The government has also issued a notification, stating that airbags will be effective only when passengers are wearing seat belts.
Maruti price hike – Impact on sales
Maruti price hike in January 2023 is unlikely to have any significant impact on sales. Most OEMs have been experiencing inflationary cost pressure and have increased prices at regular intervals. In case of Maruti, the last major price hike was in April 2022. For most cars, including Arena and Nexa range, the price hike was up to 2%. Only exceptions were Ertiga and XL6 that had witnessed relatively higher price hikes.
On the sales front, Maruti has posted strong YoY growth of 14.4% in November. Total sales have risen to 1.59 lakh units, from 1.39 lakh units in November last year. Going forward, the company has aggressive plans to regain market share. It will be looking to gain market share of at least 51%, something that the carmaker used to have in 2018-2019. Top selling Maruti cars include Alto, WagonR, Brezza, Baleno, Swift, Dzire, Ertiga, etc.
Recently launched Grand Vitara has received a good response, currently ranked at third best selling product in compact SUV segment. A Maruti rebadged version of Innova Hycross will also be launched next year. These new products will help the company achieve its sales targets.
