AUTO PUNDITZ
  • Team Auto Punditz

The best time to buy your car is NOW! PRICE HIKE ALERT!


Car prices are going up, due to an increase in input costs. This is what we hear every time when we experience a price hike communication from any OEM. But all of you must also e aware that the steel prices are set to rise again later this year, and to that, we also have the upcoming new pollution norms and efficiency norms.


So, Where does the buck stop?


Hiked prices are common communication we receive at the start of a new year, and the 3-4 percent hike we saw was expected. However, there have also been price hikes in April and may to help manufacturers offset the cost of production, due to rising raw material prices, especially in the cost of steel, aluminium, plastics and precious metals like rhodium used in the vehicle’s catalytic converters.


In the past year, steel prices have nearly doubled, and some reports point to another upward revision of steel prices in July, so expect to see another hike in car prices later this year. Though, the ban on liquid oxygen for manufacturing processes has hit domestic steel production hard, amidst rising demand. Another factor to consider is the upcoming BSVI Stage 2 norms, consisting of the CAFÉ Phase 2 and RDe norms set to be enforced in 2022-23, which manufacturers will no doubt work towards meeting in the coming year, further driving up input costs considering the R & D that goes into technology upgrades, and the expensive, rare earth metals required to beef up catalytic converters. The Corporate Average Fuel Economy rules aim for more fuel-efficient cars, specifically at least 10 per cent more efficient by the end of 2021, and 30 per cent more efficient by 2022.

This aside from lowering average corporate CO2 emissions to 130gm/km by April 2022, while the Real Driving Emissions norms will require vehicles to meet the same emissions levels in real-world driving conditions, apart from lab testing, Though, talks are on currently to push back CAFÉ 2 implementation to 2024, owing to the disruptions faced by automakers due to the pandemic.


Tata Motors and Mahindra are the latest carmakers to announce price hikes, with Tata Motor’s hikes averaging 1.8 percent across the ex-showroom price of its passenger vehicle range, while Mahindra’s price hikes range from Rs 671 on certain variants of the XUV300 to a maximum of Rs 48,860 on certain variants of the Scorpio. The most affordable Mahindra, the KUV100, saw a rise in price between Rs18,780-23,616, while Thar’s pricing only goes up by Rs 1,344. While Renault had announced a price hike on its other models in April, citing rising input costs, the introductory pricing period on the Kiger has run out recently, with all variants except a select few being subject to a hike between Rs 14,000-33,000. Despite this, the Renault Kiger remains the most affordable compact SUV in the market.


In mid-April, Maruti Suzuki had hiked prices of all vehicles in its like-up )except for the Celerio and recently launched 2021 Swift) by 1.6 percent. Hyundai too increased prices on all its models (except for the i20), with the Tucson receiving the largest hike of Rs 34,000, and the Grand i10 Nios and Aura compact sedan being the least affected. The Hyundai Creta saw a price increase of Rs 13,600 across variants except for the base. Even luxury carmakers have had to offset the rising input costs, with Volvo increasing prices on all its cars barring the recently launched S60 sedan by Rs 1-2 lakh.


With an increase in the input costs, you can rest assured that as a consumer you would have to bear the cost of a final increased selling price. Hence, if you plan to buy a car and want to save on the price hike, we suggest you prepone your decision and save some money.