This will be the second price hike for Tata cars this fiscal – Last price hike was announced in May 2021
Folks planning to book a Tata car can benefit if they make their booking soon. That’s because the company has stated it will be increasing prices of its ‘New Forever’ range of cars and SUVs. Although exact date for price hike has not been revealed, the company is expected to make a formal announcement in the coming days.
Rise in input costs
Tata Motors has said that decision to hike car prices has been taken in view of the dramatic increase in overall input costs. It covers rising cost of raw material that includes steel and precious metals. From a business perspective, it has become essential to pass some of the additional input cost to end customers.
In the auto industry, some of the key steel products used include hot rolled coil (HRC) and cold rolled coil (CRC). Prices of these products have increased significantly in recent times. Prices of precious metals like rhodium and palladium used in catalytic converters has also increased. Demand for these has gone up, as emission norms have been updated in several countries across the globe.
Tata Motors had increased prices of its cars earlier this year in May as well. Depending on the car and variant, prices had gone up in the range of Rs 4,400 to Rs 36,400. Average price hike was 1.8%.
At that time also, rising cost of steel and precious metals had prompted the company to increase prices. However, there was relief for customers who had booked their cars before May 8, 2021. Such customers were protected from the price hike. It is likely that the company will follow a similar approach this time also.
Other carmakers to increase prices
With rising input costs, other carmakers will also increase prices in the coming weeks. For example, India’s largest carmaker Maruti Suzuki is expected to announce a price hike for its cars soon. In a regulatory filing, the company had stated that due to rise in input costs, it has become imperative to pass some of the additional cost to customers. Maruti had increased prices in April as well. At the time, prices were increased by up to Rs 34,000.
India’s second largest carmaker Hyundai is also expected to increase prices. However, an official statement is yet to be made. Hyundai had increased prices earlier this year in April. It was in the range of Rs 1,000 to Rs 34,000.
Honda has also announced a price hike for its cars that will come into effect from August 2021. Honda will try to absorb as much of the additional cost as possible, but some of it will have to be passed to customers. Honda had increased prices of its cars earlier this year in January and April also.
