Tata Motors likely to hike prices of cars next week for the third time this year
Tata Motors is likely to hike price of its passenger vehicles across the entire range next week. The increase in prices of its cars is aimed to tackle the steep rise in procurement cost of essential materials like steel and precious metals.
Shailesh Chandra, President of the Passenger Vehicles Business Unit at Tata Motors, was quoted by news agency PTI saying, "We have seen a very steep increase in the prices of steel and precious metals over the last one year.
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The financial impact of the increase in commodity prices is in the range of 8-8.5 per cent of our revenues in the past one year."
The price hike of Tata cars will be its third this year. Earlier in January this year, Tata Motors had announced its first price hike when cars like Tiago, Tigor, Nexon, Nexon EV and Harrier saw the prices go up. Later in May, Tata hiked prices of the Altroz hatchback and newly-launched Safari SUV as well.
Tata Motors has initiated several cost reduction moves to be able to reduce impact of steep rise in procurement cost of essential materials. Tata Motors said that it has been able to pass a small share of the hike in prices to the customers so far.
"From the company realisation perspective, we have passed on only 2.5 per cent. From an ex-showroom perspective this would be around 3 per cent, so there is a big gap to the extent of increase that has happened (in the input costs) and what we have been able to pass on to the market," Chandra was quoted by PTI. "But with the gap still remaining and the prices of essential commodities still remaining high, we are now forced to take a price hike from next week," he added.
Tata Motors is not the only carmaker to have initiated price hikes on passenger vehicles this year. Earlier this month, Maruti Suzuki India hiked prices of Swift hatchback and the CNG variants of other models by up to ₹15,000. Honda too has announced that prices of its entire model range will go up from August.