Shares of Tata Motors rose over 1 per cent to Rs 810 in early trade on December 10, 2024, following the company’s announcement of a 3 per cent price hike across its entire vehicle lineup, including electric models.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

This increase, effective January 2025, is the third price hike implemented by the company this year, driven by escalating global commodity prices, high import duties on raw materials, and supply chain disruptions.

Impact of the price hike on popular models

Among the most affected models are Tata’s popular Nexon and Punch. The base variants of the Nexon and Punch, which currently have starting prices of Rs 8.00 lakh and Rs 6.13 lakh (ex-showroom), respectively, are expected to see their prices rise to Rs 8.24 lakh and Rs 6.31 lakh following the hike.

This price increase comes amid slowing demand in the auto industry, which has prompted automakers to offer higher discounts and moderate dealer sales.

Tata Motors’ recent performance and industry trends

Despite the price hike announcement, Tata Motors has faced challenges in recent months. Over the last three months, the stock has been one of the worst performers among all major four-wheeler manufacturers, losing more than 22 per cent. In comparison, the broader auto sector has also been grappling with rising input costs and sluggish demand following a period of strong growth.

The price hikes are not unique to Tata Motors. Maruti Suzuki, the country's largest car manufacturer, also announced a 4 per cent price hike starting January 2025 to counter rising input costs. Hyundai Motor India is following suit with price increases across all models, including the Venue, Creta, and Ioniq 5 EV, along with plans to launch the Creta EV next year.

Luxury carmakers, including Audi, BMW, Mini, and Mercedes-Benz, are also expected to implement price hikes in the new year, reflecting a broader trend across the global auto industry to pass on the rising manufacturing and logistical costs to consumers.

Tata Motors' shares traded at Rs 807, marking a 1.13 per cent increase as of 10:00 am, signalling a positive response to the price hike despite ongoing industry pressures.