Maruti Suzuki India Limited (MSIL) said on November 2 that it will raise the pricing of its models beginning in January 2023, with the amount varying depending on the model. The manufacturer said in a statement to Reuters that it is still seeing rising cost pressure from overall inflation.
However, the corporation did not reveal the amount of the anticipated price increase. Maruti Suzuki India announced a price hike for the Swift hatchback and all CNG variants earlier this year due to an increase in various input costs. Prices for all models increased by 1.3 percent (ex-showroom Delhi).
The automaker reported in its November 2022 sales numbers that total sales increased 14.4 percent year on year (YoY) to 1.59 lakh units, up from 1.39 lakh units in the same month previous fiscal. Last week, the country’s largest automaker said that it will reclaim market share from competitors such as Tata Motors after losing ground over the previous three years.
The Gurugram-based automaker wants to return to the glory days of 2018-19, when it had a 51 percent share of the Indian car market. In the domestic market, the business sells a variety of models ranging from Alto to S-Cross. Meanwhile, during late trading hours on December 2, Maruti Suzuki India shares fell 1.58 percent to Rs 8,815 a share on the BSE.
Inflation and Manufacturing Cost
Maruti continues to face greater cost pressure due to inflationary tendencies. Inflation has come to plague several countries around the world as a result of the epidemic and the current geopolitical environment. While OEMs try to control escalating costs by absorbing part of them, there comes a point when it becomes necessary to pass some of the burden on to end users in the form of a price increase.
In addition to strong inflation, the Maruti price increase is tied to forthcoming regulatory obligations. Carmakers must plan ahead of time to implement the necessary changes, which will incur additional costs. The primary goal is to improve passenger safety. Three-point seatbelts for all front-facing passengers and a rear seatbelt reminder will be among the major improvements.
These will be start from April 1, 2023. The Indian government also intends to install Bharat NCAP, which will be in accordance with worldwide safety standards. It will not be part of the minimum regulatory standards, but it will be desirable as safety features become more popular. Carmakers will naturally want for higher Bharat NCAP ratings, as these will aid with building positive brand views.
All cars will be required to have a minimum of six airbags beginning in October 2023. This was previously scheduled to go into effect on October 1st, 2022. However, because to strong opposition from some automakers, the 6-airbags rule was delayed for a year. There are unlikely to be any further concessions on this front. The government has also published a notice indicating that airbags will only be functional if passengers wear seat belts.
The increase in Maruti prices in January 2023 is unlikely to have a substantial impact on sales. Most OEMs have been facing cost inflation and have raised prices at regular intervals. In the case of Maruti, the most recent significant price increase occurred in April 2022. The price increase for most cars, including the Arena and Nexa lines, was up to 2%.
The only exceptions were Ertiga and XL6, which had experienced significantly higher price increases. Maruti Suzuki’s sales increased 14.4% year on year in November. Total sales increased to 1.59 lakh units in November, up from 1.39 lakh units in November of last year. Going forward, the corporation intends to reclaim market share aggressively. It will be aiming for a market share of at least 51%, which the carmaker had in 2018-2019.
Maruti’s best-selling models are the Alto, WagonR, Brezza, Baleno, Swift, Dzire, and Ertiga. The recently debuted Grand Vitara has received a positive response, presently ranking third in the compact SUV segment. The Innova Hycross will also be rebadged by Maruti next year. These new goods will assist the corporation in meeting its sales targets. Maruti Suzuki presently provides 15 models in a variety of sectors.
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