Tata Motors Hikes Prices of Cars Across the Board

Tata Motors hikes prices of cars across the board

Indian Market
by 5paisa Research Team Last Updated: 2022-08-08T19:00:24+05:30

Car prices hikes have become commonplace these days. Maruti Suzuki hiked the prices of cars three times in the previous calendar year and it has already effected the first rate hike for this year in January. On an average auto prices have gone up 6-7% as car manufacturers have tried to pass on the higher input costs to the end customer. The latest in the list is Tata Motors which has just announced a price hike on 18th January 2022.

The latest price hike announced by Tata Motors is a weighted average price hike of 0.9% across its brands. The actual hikes could vary from model to model. These price changes are expected to be effective from 19th January. However, Tata Motors has also stated that it has attempted to neutralized the impact by offering discounts of up to Rs.10,000 on selected models based on the feedback received from the customers.

Prices hikes are turning out to be inevitable for the auto companies. In the last one year, the prices of most materials like aluminium, steel, plastics, batteries etc has gone up sharply. Even the cost of paints and other ancillary products to an automobile have gone up sharply with the result that the auto companies just did not have the margins left with them to absorb any more cost hikes.

Most car manufacturers including Tata Motors have been absorbing part of the cost hikes. For example, while Maruti hiked the price of cars four times in the last few months, Tata Motors has only hiked twice. In fact, the Jan-22 price hike is only the second price hike after the previous price hike effected in August 2021. However, Tata Motors will be offering price protection to customers who have booked cars prior to 18th January.

The auto companies are caught in a strange quandary. The production schedules are getting impacted due to the shortage of microchips. At the same time, the consumer demand continues to be tepid, despite the encouraging numbers shown by the festive season. In the middle of all this, the costs are consistently moving up and that is putting further pressure on companies.

Calibrated price hikes are a norm for auto companies in India today. In a way, Tata Motors has managed to keep its price hikes fewer and also pegged its price hikes to lower levels. Of course, Tata Motors did hike the prices of its commercial vehicles earlier this month by 2.5%.

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