Maruti Suzuki announced on Monday that it would be increasing prices across its model range in the second quarter of FY22 owing to the continuing rise in commodity costs.
“Maruti Suzuki was left with no option but to increase prices. Steel prices have gone up by almost 80 percent, from Rs 38000/tonne in May 2020 to Rs 68000/tonne in June 2021. Similarly, due to high demand for Rhodium globally, the prices have increased from Rs 18000/gm in May 2020 to Rs 65000/gm in May 2021, an almost 250 percent in the last one year”, said Shashank Srivastava, Senior Executive Director, Marketing and Sales at Maruti Suzuki in an interview to CNBC-TV18
India’s largest passenger car maker increased prices by Rs 7,000 in January and Rs 10,000 in April. “Maruti has increased prices by 2.3 percent since January and it will not be possible to indicate the quantum of the upcoming hike at this stage”, said Srivastava.
Speaking about the demand recovery and customer sentiment since the reopening of dealerships on 8th June, Srivastava said, “Car buying sentiments have been impacted much more than last time. The daily spike in cases was much higher and COVID had a much larger geographical impact. 90 percent of Maruti's 3145 outlets are now open. We are seeing a sharp increase in bookings and inquiry levels once dealerships reopened but things are still far away from the peak of Q4 FY21”.
Maruti Suzuki has said that inventory levels would be back to the normal range of 20-25 days in June and the company had ended May with a stock of 107000 cars with dealers across the country.
Srivastava declined to give a demand projection as the customer sentiment remains uncertain amidst the possibility of a third wave but said that rabi sowing, wheat procurement and a normal monsoon were positive indications from the rural sector. “According to industry estimates the auto sector will see approximately 2.3 lakh wholesale dispatches in June and retail sales should be around 2 lakh”, he said.
(Edited by : Aditi Gautam)
First Published: IST