Buying a car or an AC may get more expensive from April because of the sharp rise in price of raw materials such as steel, aluminium, palladium copper and ABS plastic.
“With the market returning post-pandemic across the world, the prices of steel, rubber, precious metals used in catalysers like palladium and rhodium have skyrocketed. The input costs have increased dramatically. As a result, we had to announce price hike from April,” Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki India, told BusinessLine.
In January also, the company had announced for price hike, which was less than two per cent. Srivastava said that input costs had started to go up since the conversion of vehicles began from BS4 to BS6 and new safety norms in October 2019.
Likewise, Rakesh Srivastava, Managing Director, Nissan Motor India, said prices continue to escalate for auto components. “We are now constrained to increase our prices across all Nissan and Datsun models while still offering the best value proposition to discerning Indian customers,” he said. Both car makers said the raw material costs would continue to be high for the next few quarters.
Hero MotoCorp also said it will make an upward revision in the ex-showroom prices of its motorcycles and scooters, from April 1. The price increase across the range of two-wheelers will be up to ₹2,500, and the exact quantum of the increase will vary on the basis of the model and the specific market, the company said.
Spike in electronics
The sharp rise in prices of commodities and higher global freight costs has also led to intense inflationary pressures for the consumer durable companies. TV makers said that they have also been witnessing a month-on-month increase in panel prices, which are used to make LED TVs, in the past few months. Just like automobile manufacturers, most of the consumer durable players face a similar situation.
“In March, we increased the prices across three categories — refrigerator, television and air conditioner between two and four per cent. The price hike was inevitable as we are experiencing an increase in the cost of raw materials and freight,” Eric Braganza, President, Haier India said. Manish Sharma, President & CEO, Panasonic India & SA added, “We plan to raise prices of ACs in the range of 6-8 per cent while refrigerators will see an increase in the range of 3-4 per cent.” According to data available, domestic steel prices across product categories have risen sharply by around 40 per cent mainly in the October-January period. Domestic steel prices fell 6-8 per cent month-on-month in February.
And, according to Ranjan Bandyopadhyay, Executive Secretary, Joint Plant Committee, Ministry of Steel, this correction is likely to continue. This slide is mainly due to the rise in imports, following the 2022 Budget decision to reduce the import duty to 7.5 per cent across product categories such as primary or semi-finished products of non-alloy steel, long products of non-alloy, as well as stainless and alloy steel.
Kicking off with a low production base in financial year 2021 due to Covid-19, the industry is expected to grow by about 9-10 per cent in the current financial year.
(With inputs from Meenakshi Verma Ambwani & Kuwar Singh)