Carmakers announce plan to hike prices from January 2023 to offset rising input costs

Carmakers Mercedes-Benz, Audi, Renault, Kia India and MG Motor on Wednesday announced plans to hike vehicle prices from January to partially offset the impact of rising input costs.

They join the likes of market leader Maruti Suzuki India and Tata Motors, which have also made the year-end announcements to raise prices from next month.

Audi India said it will increase prices of its entire model range by up to 1.7 per cent, while Mercedes-Benz India noted it will hike the prices by up to 5 per cent from January 1.

Kia India said the quantum of price increase would be up to Rs 50,000, depending upon model and trim. Renault however did not disclose the quantum of the price increase it plans to take from next month.

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MG Motor India said, it intends to increase prices soon ranging between two-three per cent depending on models and variants.

"The primary objective of the company's business strategy focuses on a model that begets profitability and sustainability. The price correction is affected as a result of the rising supply-chain-related input and operational costs," Audi India Head Balbir Singh Dhillon said in a statement.

The new price range for the company models is directed at maintaining the premium price positioning of the brand, ensuring sustainable growth of both the automaker and its dealer partners, he added.

Audi India's current line-up includes the petrol-powered A4, A6, A8 L, Q3, Q5, Q7, Q8, S5 Sportback, RS 5 Sportback, and RSQ8.

Its electric vehicle portfolio under the e-Tron brand comprises the e-Tron 50, e-Tron 55, e-Tron Sportback 55, e-Tron GT and RS e-Tron GT.

Mercedes-Benz India said constant increase in input costs and increased logistics costs have been exerting significant pressure on the overall operational costs of the company.

This development has prompted the automaker to upwardly revise the ex-showroom price of its model range, enabling a sustainable and profitable business, it said.

Mercedes-Benz India Managing Director & CEO Martin Schwenk said although the company is absorbing the majority of the increase, it is left with no option but to pass on some portion of the cost hike to the customers.

"To run a sustainable and profitable business for us and our franchise partners, a price correction is necessitated to offset the rising inflationary cost pressures," he added.

Renault India said: "Reasons for the price hike are to partially offset the impact of constant increases in input costs largely driven by pricier commodities, fluctuations in foreign exchange rates, inflation and also due to regulatory obligations."

It, however, did not disclose the quantum of its impending price hike.

Jato Dynamics India President and Director Ravi Bhatia said the increase in commodity prices coupled with supply chain issues faced by the manufacturers, addition of new technologies and features in automobiles and meeting regulatory requirements have pushed up the cost.

Hyundai Motor India and Honda Cars said they have not yet taken a call on the matter.

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