- Friday, April 26, 2024
By: Shubham Ghosh
MAJOR Indian automaker Tata Motors is looking to increase prices of its entire range of passenger vehicles from the coming week in order to offset the steep rise in procurement cost of essential goods like steel and precious metals, according to a top company official.
Tata sells a range of popular passenger vehicles like Nexon, Tiago, Harrier and Safari in the domestic market.
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“We have seen a very steep increase in the prices of steel and precious metals over the last one year. The financial impact of the increase in commodity prices is in the range of 8-8.5 per cent of our revenues in the past one year,” Tata Motors president, passenger vehicles business unit, Shailesh Chandra told PTI.
He said the company has so far passed on only a small part of the rise in input costs to customers.
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“From the company realisation perspective, we have passed on only 2.5 per cent. From an ex-showroom perspective this would be around 3 per cent, so there is a big gap to the extent of increase that has happened (in the input costs) and what we have been able to pass on to the market,” Chandra said.
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The top official also said that the company has been able to mitigate some of the rising input costs by taking various cost-reduction initiatives as it did not want to pass on a big quantum of price hike to the buyers.
“But with the gap still remaining and the prices of essential commodities still remaining high, we are now forced to take a price hike from next week,” he added.
Prices of precious metals like palladium and rhodium have gone up considerably over the last one year. Steel prices have also remained high during this period.
Less than a month ago, India’s largest carmaker Maruti Suzuki hiked prices of its popular hatchback Swift and CNG variants of other models by up to Rs 15,000 to deal with the rising input costs.
Honda, another carmaker, has also announced to raise prices of its entire model range in the country from next month in view of the rising commodity prices.
