Latest Car News in India

Thursday, December 29, 2011

By Manoj Kumawat

Car makers chalk out plan to deal with impending car price rise

Car Industry in India is on the verge of a transformation, where it will see many new car launches in 2012, there is also an imminent car price hike soon. If this happens, car companies must think of ways to retain numbers on their sales charts as due to rise in car price, the demand will reduce considerably. Already, Mahindra has reportedly been in the process of remodeling the price list of the recently launched Mahindra XUV 500. Overall, the price rise regime in India is expected to begin in January 2012.

As far as the percentage of increase in the car prices, an independent survey has projected that there will be an increase of 2 percent to 10 percent likely in the first quarter of the next financial year. The rise has been triggered by the current weakening of dollar over the rupee resulting which there is a hike in input cost. Besides, some car companies are reeling under severe labor crisis translating into hike in input costs per car.

Mahindra XUV 500 Pictures

See More Mahindra XUV 500 Pictures Get Mahindra XUV 500 Price

So how the car makers will be doing away with this situation wherein the demand may further slip. As part of the strategy, car makers and auto parts makers will be exploring new markets such as tier II and tier III cities besides launching the diesel makes of their cars and stepping up the promotional offers.  

Another important factor that has come into picture is the continual effort of car companies in India in wooing the customers in the period of January to November 2011 when there was a significant slide in auto sales compared to the same period last year. The auto companies gave attractive offers that have though proved fatal as input costs increased and now they have no other way but to increase the price of the cars.

Apart from this several international disturbances such as the slow pace of economy in Europe and US as well as in Japan besides other countries have all constrained the automakers to sell cars at the same price they were selling lately.

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