Price hikes to hamper sale of cars
The hike in interest rates on car loans had earlier driven away a large chunk of consumers. The hike in interest rates affected selling of cars as well. Selling of small segments of cars popularly known as family cars like Maruti Alto, Wagon R, Ford Figo and Santro registered 50 per cent decline in 2011. The present hike in car prices, it is feared, could still affect the market further.
The car manufacturers cite that the input costs of raw material and production costs have gone up substantially. The car manufacturers were also affected due to constant variations in foreign exchange rates as major components of several cars are imported.
Major auto-makers like Maruti, Hyundai, General Motors, Tata Motors and Ford have increased prices of almost all the models. The hikes ranged from Rs 2,000 to Rs 17,000. For example the Maruti company. The company at present produces cars of 16 varieties. The company apart from the Sedan Dzire has increased prices of almost all the models. Maruti Alto which was earlier available at Rs 3,31,286 now costs Rs 3,37,783. The hike was about Rs 6,400. Likewise, the Alto K-10 which was earlier sold at Rs 3,71,295 is now available at Rs 3,76,999. The price of Alto WIR has been hiked to Rs 4,59,357 from Rs 4,51,853. The price of Estillo was hiked by Rs 7,200 and now sells at Rs 4,52,933. The price of popular model Swift-Diesel was increased by a staggering Rs 17,000.
Now look at the changed prices of Hyundai models. The company has increased prices from January by 1.5 to 2 per cent. The company has nine models. The company has not increased the price of newly introduced entry level model Aeon. The company has hiked ex-show room prices by at least Rs 4,000.
The General Motors has increased the prices of its models like Spark, Beat, Cruise and Travera. The prices have been increased between Rs 3,000 to Rs 15,000. However, there has been no northward movement in prices of Avio, Uva, Optra and Captiva-SUV. Likewise, Toyota too has increased prices of LIva and Etius models. Likewise, the Mahindra & Mahindra has hiked the price of its SUV version XUV-500 by an astronomical Rs 55,000.
Distributors of cars fear that the hike in prices by car manufacturers coud severely affect sale of cars in the state. As such it was hampered earlier when interest rates on loans were hiked by banks and financial institutions.