Mahindra evaluating up to a 3% price hike as steel prices surging rapidly
Indian auto major Mahindra & Mahindra (M&M) is keeping a close watch on the recent increase in commodity prices. The steel price is surging rapidly, and considering the fact that steel is heavily used as a raw material for vehicle manufacturing, the automaker is keeping a watch to see how the situation pans out. Depending on that, the automaker will initiate action to safeguard its business.
Mahindra cars are likely to become pricier by up to 3%. The upward price revision will be ranging between 1.8% and 3%, depending on models and variants, as said by M&M Chief Executive (Automotive Division) Veejay Nakra to PTI.
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Owing to the surging prices of the raw materials, other auto manufacturers such as Tata Motors and Maruti Suzuki India have already announced price hikes in a bid to offset the impact of the increased input costs. Tata Motors cars have become dearer by up to 1.8% under the latest price revision. Maruti Suzuki cars too come pricier by up to ₹22,500 according to the latest price revision announced by the car brand.
The domestic steel producers have hiked the prices of hot-rolled coil (HRC) and cold-rolled coil (CRC) by ₹4,000 and ₹4,500 per tonne respectively in the last few days. Both the HRC and CRC are heavily used in automobile and auto component manufacturing as well. With the price revision, now a tonne of HRC costs ₹67,000, while the one tonne of CRC costs ₹80,000. The price of the HRC and CRC could again be increased in mid-May or early-June 2021.
Talking about the surging prices of raw materials and the possibility of the Mahindra vehicle price hike, Veejay Nakra said that the homegrown automaker uses multiple levers to manage its cost. He said that the company always tries to mitigate commodity price increases through internal cost measures, be it on material cost through value engineering or by managing our fixed cost.
Earlier this year, in mid-April, Mahindra has already announced a price hike decision owing to the increase in commodity prices over the past couple of months that resulted in input costs hike. "Going forward, we will keep a close watch on how the commodity prices play out and take appropriate action accordingly," he added while talking about the possible upcoming price hike.