Q2 FY22 has seen manufacturers put into effect price revisions, and MG Motor India is the latest to do so
The Indian auto industry is by and large plagued by the same niggles. Some more than others. For starters, input costs have shot up. Now, there’s nothing alarming about that as input costs have been increasing each year.
And manufacturers pass on some part of this cost increase in a phased manner to customers by marginally increasing vehicle prices, more or less in each new quarter. This trend has never been viewed as negatively as it is in current times. Given the backdrop of decline in sales, disruption in economy, and uncertainties, the last thing one would view favourably now is more expensive cars. But this is inevitable.
MG Motor India too has effected a price revision. Having started operations here fairly recently, the company already sells 4 cars here. Price hike across the product portfolio ranges from 2-3 percent, reports The Hindu Business Line. This will be the 4th price hike for MG cars this year. First was in Jan 2021, followed by Feb 2021 and April 2021.
There’s little the Indian auto industry can do to withstand forces that impact current market situations. It beggars belief that the world could have actually come to a standstill but it did happen. And now manufacturers are scrambling to do the best to pick up the pieces.
Market disruption has been the order of the day for months at an end. While Covid-19 pandemic protocols has hampered production and sales activity, there are other forces at play that have further compromised an already cowering industry.
For one, sales recovery looks like a thing of the future. For now, if companies could simply get on with meeting pent-up demand that would be a good start. But even this simple functionality continues to be compromised owing to wide ranging lockdowns announced by state governments, and ongoing market disruptions.
Semiconductor chip shortage
For one, everyone’s in the market for semiconductors but supply is lower than demand. And costs are up. Sadly, price revisions have been in such abundance in 2021 that one forgets how many have been effected thus far. The Hector previously absorbed three price regions. One in January, one in February, and then gain in April 2021. And now in July 2021.
Input costs are now the tree that doesn’t stop taking. Add to this logistics and supply chain issues and it’s a recipe for turmoil. However despite ongoing difficulties, MG Motor did report saes at over 3.5k units in June 2021, and expects the semiconductor chip shortage issue to continue impacting the market in July – August.