Maruti Suzuki car costs will rise for the third time in 2021

Mayank Dhingra

Maruti Suzuki It has been confirmed that price increases will begin in September 2021 across its entire model series. This will be the third price increase by a leader in the passenger car market, and this move may see other participants follow suit.

  • All Maruti Suzuki models may be affected
  • Increased by rising commodity prices

Maruti Suzuki price increases: previous increases and affected models

Although the company has announced its plan Price increase in the second quarter In the 2021-22 fiscal year (July-September 2021), it increased the price of the Swift hatchback by 15,000 rupees in June and increased the price of all its CNG models by 10,000 rupees on July 12.

The latest regulatory document refers to its announcement in June, but mentions that the upcoming price increase has been planned for each model.Although the prices of various models may rise, Swift and compressed natural gas series Including Alto, S-Presso, Ertiga, Eeco, Tour S and Tour M, all are spared.

Maruti Suzuki price increase: why it happened

MSIL lists commodity price increases as the main reason for passing part of the impact to customers. Its profit margin (after-tax profit) in the first quarter of the 2021-22 fiscal year (April to June 2021) hit a multi-quarter low of 44.08 billion rupees, which is the same as the fourth quarter of the 2020-21 fiscal year (January to June 2021). Compared with March), it was down 62% month-on-month.

The company attributed the decline in PAT (profit after tax) to rising commodity prices, and the company said it is taking a number of cost-cutting measures to deal with this situation.

According to data from the Association of Indian Automobile Manufacturers (SIAM), commodity prices have risen sharply in the past few months. Compared with the same period last year, automotive raw materials such as HR steel rose by 87% in June 2021. In the same month of this year, CR steel also rose by nearly 88%.

In addition, the price of precious metals has also risen. In June, rhodium, palladium (+33%) and platinum (+29%) increased significantly by 149% year-on-year. All of these are essential for automotive aftertreatment systems that must meet the country’s BS6 emission standards.

Other challenges facing automakers

In addition to the above-mentioned increase in raw material prices, the Indian automotive industry is also facing a global semiconductor shortage. This has led OEMs and their suppliers to purchase chips from alternative suppliers at high prices to alleviate this situation and meet consumer demand, while trying to maintain production on the assembly line.

Like MSIL, Tata Motors also announced a price increase for its passenger cars starting on August 3. Although the company introduced a 0.8% increase in its model range earlier this month, this is the third price increase this year. The manufacturer increased the price by 26,000 rupees in January.

In a recent interview with OurProfessional, MSIL Chairman RC Bhargava said: “From 1993 to 2010, the Indian automotive industry grew rapidly at a double-digit rate, and it has not been slowing down until the last 10 years. Although there are several The reason, but the key is that the cost of buying cars for ordinary citizens has risen sharply in the past decade.”

“This is mainly because of regulations and the depreciation of the rupee, which have led to increased manufacturing costs, because a large amount of materials still need to be imported.”

See also:

Maruti Baleno facelift: seeing the new interior for the first time

Maruti won the title of largest exporter from Hyundai Motor from April to July 2021

Maruti Suzuki fined 2 billion rupees for anti-competitive dealer policy

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