This would be the third time in this fiscal that General Motors India is planning to hike prices of its various cars. The raise that is expected to be somewhere up to Rs. 10,000 will be effective from the first week of the September 2013. Three models have been highlighted by the auto giant that will see a price increase. These models are Beat, SAIL and Enjoy. The decision has been taken in lieu of increasing cost and free fall of Indian currency against the strong US dollar.
The sad tragedy of depreciation of rupee against the US dollar continues and government has utterly failed to put a leash on it. Notably, the currency had recently touched its historic low value of Rs. 68.825 against the dollar and as per the latest news, it opened on 67 levels after the fresh measures announced by Reserve Bank of India.
The price hike was announced by the company in wake of sharp fall of the Indian currency. News came in hot when General Motors threw more light on the move due to volatile market situations. One of the company officials said that the company has been forced to increase cost of its models due to the declining value of rupee. As fas as prices of Beat, Sail and Enjoy are concerned, the hike is expected to range from Rs. 2,000 to Rs. 10,000, which clearly indicates more load on the pocket of the price sensitive Indian buyers.
Commenting on the company's unanimous decision, as taken by the board members, P. Balendran, Vice-President of General Motors India, said, “The market continues to be in a depressed condition because of the rupee depreciation and other conditions, all related to economic situations. Therefore, we have decided to raise prices up to Rs. 10,000 from September 1”.
Balendran also indicated that the price of other models may be revised as well, depending on the market conditions. He said that the company is evaluating proceedings and as of now, nothing can be said with conformity regarding price hike of other models. When asked about the negative impact of price hike in the festive season, Balendran indicated that the auto sector is already hit by low sales and chances are that this situation will continue even during the upcoming festival season. This can be said because of the fact that buyers are postponing their decisions owing to the high interest rates and constantly increasing fuel price. He also agreed that heavy discounts due to market competition are not helping, but impacting the margins.
On the other hand, Balendran seemed to be quite optimistic when he stated, “However, the sales will be marginally better as compared to first half of the year.” Currently, Beat model has a price tag that falls between Rs. 3.89 lacs and Rs. 5.98 lacs. The Sail UVA has a price between Rs. 4.19 lacs and Rs. 6.70 lacs while Sail sedan is priced between Rs. 4.99 lacs and Rs. 7.53 lacs. Coming down to Multi Utility Vehicle (MUV) Enjoy, the price ranges from Rs. 5.49 lacs and Rs. 8.04 lacs (all prices ex-showroom Delhi).
It must be noted that General Motor is not the lone player who has decided to go for a price hike. Recently, German luxury car maker Audi has also announced an increment of up to four per cent in prices across its different models available in the Indian auto market. The decision came in to mitigate the impact of the depreciation of Indian currency and rise in input costs.
