Rising costs are putting the braking on the Indian automobile industry's recovery

Rising costs are putting the braking on the Indian automobile industry's recovery ...

The Indian automobile industry is still struggling to recover from the pandemic-induced calamity, and now a new battlefront has opened up: spiking inputs.

Increased expenses of goods have resulted in more expensive semiconductors, catalytic converters, and other car components. Overall, raw material prices have increased since the start of the epidemic in 2020, resulting in a cost increase of over 75 percent for original equipment manufacturers.

In the last months, the situation has worsened.

ICRA has had an unprecedented downturn in raw material prices in the past one year or so, and car manufacturers have been left with no choice but to pass the price increase to the consumers, in order to protect their margins, said Rohan Kanwar Gupta, vice president and sector head of corporate ratings.

Maruti Suzuki, the country's largest automobile manufacturer, will introduce its new price tags by this month-end. Over the past year, the costs of the company's vehicles have been horrified due to a decrease in many input costs, Maruti Suzuki said on April 6.

The company has been operating since January 2021. But this may only be the beginning, according to experts, as more manufacturers follow suit. If only to survive.

Similar hikes have been announced by Tata Motors, Audi, and BMW in April.

We are required to hike up to 3% in our model range due to rising input costs and rising forex rates, Balbir Singh Dhillon, Audi's India CEO, told Quartz.

BMW's India subsidiary "adjusted the material and logistics costs," according to Quartz's queries on a possible increase in prices in the coming months.

There is no doubt that price rises have the potential to alter/moderate demand sentiments in any automotive segment, and the ongoing price rises are no different, said Gupta of ICRA.

Consumers whose confidence is already shaky due to a.. is also tough to maintain, especially since.

Funding automobile dealers associations in India have ruled out the supply quorum despite demand from passenger vehicles remaining high.

Companies can minimize the damage by restoring the depleted inventory, according to Gupta. However, that will not be easy as dealers are dealing with a supply shortage.

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