Prices of Car Likely To Increase Due To Inflation

Added in: Maruti Suzuki


The industry thrived on our fears of the cost of automobiles going up due to increase in excise pre-Budget 2011. Luckily, the FM made the decision of keeping the duties consistent at 10% – and everyone heaved a sigh of relief. Talking about the sales all the leading companies have registered a notable number of units sold in February 2011 compared to February 2010.

Let’s start off with Maruti Suzuki this year. In Feb it sold around 1, 01,543 units compared to 84,765 units last Feb that comes to around 20 percent growth. Hyundai managed a meager 5% growth with sales in last Feb 31,001 units grew to 32,629 units in Feb this year. Skoda Auto on the other hand saw an amazing 39.17 percent growth. Sales last Feb were 1,805 units which grew to 2512 units this Feb; Skoda currently is offering just four models, which are the Laura, Superb, Fabia and the new Yeti. Mahindra and Mahindra this year sold 33,378 units to 27,894 units last Feb, which means a decent 19.66 percent growth. Finally talking about Ford, which has increased its sales by astounding three folds with 9,293 units this Feb compared to 3,223 units last year, Figo has done its magic for Ford and taken it a long way. With the new Fiesta ready to be launched, it will be one of the eight cars Ford plans to launch In India.

In all the good spirit of the excise duties being freezed at constant 10 percent, most of the companies will keep their prices same. That happiness, however, may just be short lived as leading companies are facing issues coping with the increasing price of the raw materials, which go in making the cars. Maruti and Hero Honda are witnessing around 20 percent dip in their profit margins due to the inflation. Finally, all this will force them to increase the price of their cars soon.  With inflation in the country and rising prices of fuel the purchaser is going to be at the greatest loss which will lead to a fall in demand of vehicles, this is what the industry fears majorly.

In all probability, we will soon the announcement of car prices rising sooner than you think. Brace up, or buy now if you have finalized the model.


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