German luxury carmaker Mercedes Benz on Thursday said it will hike prices of its vehicles across models by up to 4 per cent from September to offset adverse impacts of rising input costs and adverse forex movement.
Mercedes-Benz hikes car prices as Rupee dives
“The rising inflation due to geo-political dynamics, coupled with rising input costs and increasing forex rates has been exerting significant pressure on overall operations,” Mercedes-Benz India said in a statement.
While the rupee has depreciated by more than 5 per cent against the Euro in last eight months, the RBI’s repo rate has gone up by 0.5 per cent in last couple of months, it added. The combination of all these factors led Mercedes-Benz India to upwardly revise the prices of its entire model range and also the retail finance rates, it said.
The upward revision of the price across the entire model range will be effective from September 1, 2018, and would be up to 4 per cent depending on the model, the company said. Commenting on the step, Mercedes-Benz India Managing Director and CEO Roland Folger said, “Considering the rapid depreciation of the rupee against the major currencies in the last few days, we were left with fewer options, but to make some necessary price adjustments to our product range at the moment.”
A steady rise in input costs against the backdrop of an unfavourable forex rate and high inflationary cost together, have had a significant impact in the recent past, he added. Mercedes-Benz currently sells a range of sedans and SUVs starting from the A-Class to GLS luxury SUV and Maybach S560, priced between Rs 27.86 lakh and Rs 1.94 crore.
In April, luxury carmakers such as Audi, JLR and Mercedes-Benz had hiked prices in the range of Rs 1-10 lakh to pass on increase in custom duties. Other companies such as Mahindra & Mahindra, Tata Motors and Honda Cars India have also announced price increases from this month citing rising input cost.
Maruti Suzuki The country’s largest carmaker Maruti Suzuki India (MSI) also hiked its prices on Thursday by up to Rs 6,100, with immediate effect, in order to partially offset increase in commodity and distribution costs and adverse foreign exchange rates.
The price change varies across models and is up to Rs 6,100 (ex-showroom Delhi), the company said in a statement. The new prices are effective from today, it added. MSI sells a range of vehicles from entry level Alto 800 to mid-sized sedan Ciaz. These were priced between Rs 2.51 lakh and Rs 11.51 lakh (ex-showroom Delhi) before the hike.
Earlier this month, MSI Senior Executive Director (Marketing and Sales) R S Kalsi had said the company has been analysing the adverse movement of commodity prices which were going towards the higher side. Besides, the foreign exchange rate had impacted the company adversely, while the fuel prices too have increased, adding to the logistics costs, he added.