The price hike is said to be a result of higher input costs
Mahindra & Mahindra has joined the likes of Tata Motors, Toyota and Isuzu by announcing a price hike across its models starting next year. The prices of Mahindra’s personal and commercial vehicles are set to go up by 3 per cent. The company has cited increasing input costs as the reason behind the increased prices of its cars. The carmaker says that it'll swallow the higher costs till the end of the 2017 calendar year. Hence, cars produced in 2018 are expected to carry a bigger sticker price.
That means particular variants of some of the vehicles will witness the maximum hike of 3 per cent while others will get a smaller bump in prices. Commenting about the impending price jump, Rajan Wadhera, president of the automotive sector at Mahindra & Mahindra, said, “We have been holding back on price hikes and absorbing the higher input costs for a while, but with the increase in commodity prices we will have to take a price increase.” With a flat hike of 3 per cent, the entire portfolio could see an increase in price ranging between Rs 13,000 and Rs 56,000.
Routine increase in cars prices is a common practice in the Indian auto industry. It helps carmakers compensate for inflation. Further, increasing the prices around the new year allows them to clear up the previous year's inventory. Discounts and offers come in big packages around this time, and the threat of an imminent price hike helps discounts and offers to appear larger than they are.
The news of a potential price increase and the lack of offers can significantly reduce the footfall at dealerships and expand the stockpile out of proportion. Some manufacturers increase their cars' prices at the beginning of the new year while others do it after opening new books in April. A few models break this cycle and undergo a price revision individually to balance the supply-and-demand equation.
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