The constant increase in freight and fuel prices for auto sector is one of the last reasons, due to which the carmaker companies increase the prices of all the models.
Recently, Hyundai Motor India has decided to increase the prices of all its models by 2 percent, excluding Creta Facelift. That is, now from June 2018, Hyundai’s trains will be up to Rs 50,000. Apart from this, media reports suggest that Maruti Suzuki can also increase prices of its models from Rs 5,000 to Rs 25,000 next month due to increased input cost.
In such a case, the question arises whether other companies other than Hyundai and Maruti can also increase the prices of their cars? About this, the country’s renowned auto expert Two to Dhawan has given three reasons for the special conversation with Jagaran Auto. They have said that for what reasons car companies can increase the prices of their cars up to a few percents in the coming months.
The continuous rise in raw material prices
Two to Dhawan pointed out that the prices of raw material are continuously increasing in the last six months. In such a situation, after the increase in prices from the domestic car maker companies on the new year and from the new financial year, once again the prices can be increased by the second quarter of the current financial year to reduce the input cost.
Increase in freight and fuel prices
For auto sector, the steady increase in freight and fuel prices is one of the last reasons, due to which the carmaker companies increase the prices of all its models. According to the Indian Foundation of Transport Research and Training (IFTRT), the increase in truck prices has increased by 2 to 2.5 percent due to continued diesel prices in the last few days. Due to lack of freight, the truck route has seen a decline of 4.5 to 5.5 percent during the last month. Due to this, the increase in freight rates for car companies can also be a reason to increase the prices of their models.
Custom Duty Increase on Auto Components
Components of many car companies are imported in India and most foreign companies do it because their components are made overseas. In this case, a customs duty of engines, engine gearboxes, and transmission shafts has been increased to 15 percent, which was 5 to 10 percent of the last financial year.
At the same time, customs duty on Completely Built Units (CBU) of motor vehicles (trucks and buses) has been increased from 20 to 25. In this way, Germany’s car companies had already increased prices of their cars at the beginning of the current financial year, but now in the second quarter, the company can take this step again.
BY:- Abhay kushwaha