Price rise is just around the corner for auto major Maruti

With an enviable growth of 30 per cent in the year 2010 by the automobile companies, the prospects for the future couldn’t have been much brighter. But the new year along with the new dates have brought in new concerns . A few among them is raising fuel cost by petroleum PSU’s, a potential Excise hike in waiting and more importantly the rising input cost. The companies are apprehensive about their sales prospect in this year while they have announced a hike in prices of their vehicles. Majority of the auto makers have announced their intention to raise their product’s prices marginally by a percent or two.

This change of events has gripped all the auto makers including leader of the herd, Maruti Suzuki India. It has been reported that market leader Maruti may be forced to increase its products prices courtesy to the rising cost of input. If report in the business daily Economic Times, are to believed this decision will be taken as soon as next week in the meeting called upon by the top-management at Maruti Suzuki India. It was further revealed that the price rise would not be a blanket one, but will be on a case by case basis.

New prices will be effective without any delay on the same say on which the decision will be taken. It must be remembered that during the last quarter’s results, Maruti admitted that it is facing severe bottom-line pressure thanks to the increase in the price of commodities. For the last quarter Maruti Suzuki India ltd has registered a 4.95 percent rise in its net profit which converts into Rs 598.20 crores. In monetary term the cost of components and raw material went up during the quarter by an astonishing Rs 1683.99 crores. Notably the company has been in too the price-revision mode twice during the last year. Maruti is not the only one which is mulling at increasing their prices but other companies like Mahindra & Mahindra, Tata Motors, General Motors and Hyundai Motor India too are contemplating on the price rise issue. Earlier in the month it was reported that GM has expressed its intent to raise the price of its product by 1.5-2.5 percent. While Volkswagen, the German car maker has raised the price of its small car, the Polo by more than 2.9 percent effective from this month.

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