Prices will be increased based on the model and will cover Maruti’s entire product lineup
In 2023, Maruti had increased prices in January and later in April. With the new year, prices will be increased again in January 2024. Maruti has notified the same in a BSE filing, as part of its regulatory disclosure norms.
Maruti price hike – Increased production cost
Inflationary conditions continue to prevail across the globe due to geopolitical and economic factors. It has impacted the global supply chain, resulting in increased input cost for the auto industry. In its BSE filing, Maruti Suzuki has stated that the company is facing increased cost pressure. It includes the overall inflation as well as increased commodity prices. Carmakers including Maruti make efforts to absorb the additional costs and also try to reduce production cost. But beyond a point, there is no option other than to pass on some of the increased cost to end users.
Maruti’s price increase in January 2024 will be applicable across the range. Maruti Arena range has Alto, Alto K10, WagonR, Celerio, S-Presso, Swift, Eeco, Dzire, Brezza and Ertiga. Maruti’s premium Nexa range has Ignis, Fronx, Baleno, Ciaz, XL6, JimnyGrand Vitara and Invicto. Maruti cars are priced in the range of Rs 3.54 lakh to Rs 28.42 lakh.
Exact price hike for each model will be announced in January 2024. Based on earlier price hikes announced by Maruti, price increase in January 2024 is likely to be in the range of 1% to 2%. In January 2023, average price hike for Maruti cars was 1.1% across the range. Something similar is expected in January 2024 as well.
Upgrades related to compliance with stricter emission norms and mandated safety equipment are likely to be the primary components for increased input costs for carmakers in 2024. High cost of semiconductor chips also needs to be considered in the price calculations. Cars with hi-tech features are likely to witness a higher price hike in comparison to cars with relatively fewer electronic equipment.
Other carmakers are also likely to increase prices
By December, several other carmakers are also expected to announce price hikes. For example, Audi has already announced that it will be increasing prices across the range by 2%. The increased prices will be applicable from January next year. Just like Maruti, Audi has also stated that increase in prices is linked to increased input and operational costs.
As such price hikes are announced every year by most carmakers, it is unlikely to have any significant impact on car sales. Maruti continues to be a dominant player, with market share of 43% in October 2023. The company sold a total of 1,68,047 cars, as compared to 1,40,337 units in October last year. YoY growth is 19.75%. This festive season has been particularly rewarding for other carmakers as well. Nine among the top 10 have registered positive YoY growth in October 2023.
