New Delhi: Car prices are seen to be heading north as prices of principal raw material,steel, are widely expected to go up. With top steel makers in the country having recently indicated that prices of hot-rolled products will be raised by between Rs500 Rs1000 per tonne, car makers may have no option but to raise prices.
Hyundai Motor India has already announced that it would raise the price of its flagship Santro by Rs 8,000 and Accent GLE variant by Rs6,000. The company plans to hike the prices of other Accent variants as well and sources said the price of the Viva variant would be hiked by Rs16,000.
Hyundai plans to maintain the prices of the Elantra and Sonata and is in the process of analysing the impact of the price hike of the Getz. Hyundai had last raised prices by Rs 10,500 on its Santro and Sonata models.
The country's biggest car manufacturer, Maruti Udyog, and European auto major, Skoda Auto India, also said they were considering raising prices from January 2005 but did not indicate the quantum of the hike.
Jagdish Khattar, MD, Maruti Udyog, said the company was looking at increasing its car prices in January due to increase in input costs and emission norms.
Ford India is also said to be considering a price hike if the impact of the price hike in steel is significant. Tata Motors plans to hike car prices when the Euro III vehicles roll out in the next quarter of the present fiscal.
Mahindra and Mahindra, which recently announced a 20-day celebratory reduction in Scorpio prices, is considering the impact of the HR price hike and will take a decision in a few days. Recently M&M announced a price reduction of Rs38,000-Rs55,000 across variants valid from December 1-20.
Toyota Kirloskar Motor cited the strengthening yen as putting pressure on production costs and said the Corolla is expected to see a steeper price hike as compared to the Qualis.
Industry experts say carmakers tend to create a price phobia at the end of the calendar year to push sales.
This time, however, car prices are set to go up more concrete reasons. Maruti and Skoda are citing new emission norms and increasing input costs as the reasons to increase prices. They say they will have to make fresh investments as the new Bharat Stage III emission norms come into effect from April 2005. This will need investing in newer technologies, which in turn translate into higher prices.