Maruti Suzuki, Hyundai Motor & Volkswagen to Skip Hike in Prices

The constant fall in the demand for cars has given the opportunity to the customers to buy cars at the last year’s customary price as the carmakers like Maruti Suzuki, Hyundai Motor and Volkswagen haven’t hiked the prices in January.

January 16, 2012: Maruti Suzuki, Hyundai Motor and Volkswagen are the carmakers who have skipped their hikes in customary price in the month of January for the first time in 15 years. The carmakers have skipped their price hike due to constant fall in the demand for the cars. This has resulted into a great opportunity for the customers to buy new models at the last year’s price.

The sales of cars have reduced to only 1.59 lakh units in December from 2.18 lakh units in September, despite discounts and freebies offered by the carmakers. Moreover, the last four months saw rise in the costs of the components due to devaluation of rupees against the US dollar. So, hiking price now would have resulted in losing of potential buyers further worsening the situations.

“We would be increasing prices soon, but a final decision is yet to be taken,” said Mr. Mayank Pareek (Managing Executive Officer for Marketing & Sales of Maruti Suzuki). Moreover, even the Toyota Kirloskar Motors has not taken any call over hiking the price. “The Change in price is expected in the next few days,” said a senior executive of Toyota Kirloskar Motors. In December 2011, the carmakers announced of hiking the price by up to 1 lakh from January 1, 2012 expecting the buyers would be pushing up the year-end sales. However, this strategy failed to attract the customers to showrooms for buying the cars.

According to Abdul Majeed (partner at PricewaterhouseCooper for automotive practice), the car makers are under pressure as the fall in the sales has become very model specific. Mr. Majeed said, “For instance, while Maruti is selling its Swift hatchback in good numbers, its other flagship models such as Alto and WagonR are reporting sluggish sales.” The same is the case with the Hyundai Motor having seen rise in sales of Verna and fall in the demand for i10 as well as other models.

Although the carmakers are in trouble with the decline in the footfalls, this has worked positively for the customers as they are getting the opportunity to buy new models at the last year’s price. Moreover, the cars launched at the 2012 Delhi Auto Expo are also priced low considering the slow-down in demand for the cars.