InvestorQ : Would Maruti be able to attract customers after two rounds of price hikes in this year?
Aditi Sharma made post

Would Maruti be able to attract customers after two rounds of price hikes in this year?

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Mahima Roy answered.
8 months ago
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Maruti Suzuki announced decision to increase prices of its vehicles on an average by around 1.6% across its product portfolio. This has been necessitated due to a substantial spurt in the prices of commodities like steel, copper and crude oil in the international market, which are all important inputs for the auto sector. The price hikes are meant to offset the rise in input cost. This is the second price hike this year and it has indicated at a third hike too.

The reasons are not far to seek. For example, Maruti has already seen an impact of 300 basis points in the last quarter and the way the commodity prices have risen, it could go up by another 200 bps. While demand is likely to get impacted by the overall economic slowdown, the good news is that most of the auto companies plan to hike prices as they do not have the margin leeway at this point to absorb these costs. So there is really no choice.

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