Manufacturers like Toyota and Mercedes-Benz are reportedly considering increasing car prices in India as the value of the Indian Rupee reaches almost 73 compared to the US dollar. The automakers believe the weakening rupee will be a major concern for the companies, and they might soon have to hike prices in India to dater increasing cost. Among other carmakers, Honda Car India has also reportedly talked about the possibility of introducing yet another price hike due to the falling rupee.
Talking about the company's plan to increase car prices in India, N Raja, Deputy Managing Director, Toyota Kirloskar Motor (TKM) told PTI, "Currently, we are absorbing the high costs. However, if it is difficult to absorb in the coming days due to further depreciation, we will have to pass on a part of this cost to the customers by increasing the price."
Michael Jopp, Vice President, Sales & Marketing, Mercedes-Benz India, expressed some similar concerns. "We have already implemented some price hikes based on development which happened over the last 2-3 months. The last few weeks have seen some more depreciation which again is a concern. At this point of time, we are observing but in case it continues further, price hikes are inevitable," he said.
According to Raja, despite the substantial increase in localisation, Toyota is still dependent on imports for certain specific components. Right now, the company offers a range of India-made vehicles, including the Etios series, Fortuner and Innova Crysta, in addition to full imports like Land Cruiser SUV range. Commenting on PTI's question about the possibility of enhancing exports as a measure to balance the increase in import costs, Raja said, "We cannot specifically comment on our future export plans. Having said that, Toyota is a global player with multi- production base in many countries, thus limiting our export space"
Mercedes-Benz India's Jopp, on the other hand, said that the company has already increased prices up to 4 per cent from the current month to offset adverse impacts of rising input costs and upward forex movement. However, Jopp did not reveal the timeframe for the next price hike.
The Indian currency is said to have been caught in a free fall in the past few sessions and has been tagged among the worst performing currencies in Asia in recent times.