The increase in the car sales is whooping in the last 10 months -67%-and the celebration among the makers is going well. The reasons cited for this increase are the government’s stimulus package and loan offers from the financial institutions. But the jubilation might face the end, as the companies are rubbing their shoulders to tackle the proposed price rise in the new year. Almost all the manufacturers are in the plans to hike the price and to woo the customers for buying the cars by not minding the rise.
Skoda Auto (Fabia and Superb) has fixed the increase to a minimum of Rs20000; M&M is on the bid of meeting the emission norms thereby changing the engine patterns which will end up with an inevitable rise. Honda Siel quotes the import tax and the variation in yen value. But the car makers adduce the price due to the increase in the interest rates from the banks’ apex Reserve bank of India. RBI mooted this after the danger of rise in the inflation during November. Many banks have already fixed strict norms for two wheeler loans.
Toyota Motors says 75% of its sale is boosted from the finance only. The overall increase in the price of raw materials by 2-5% forced the makers to compensate with the hike in the cost of the cars. All these factors will have a deep impact on the market of the cars, says the president of M&M. this rise is in spite of the government’s relaxation of excise duty on compact cars to 8% from 12%.
The automobile industry has been facing a fever of fear on the budget proposals which is barely two months away. Whatever may be the outcome of the budget there will be a definite increase in April, when the emission norms comes into effect. The speculative value of currencies will also contribute to the rise in the price. Honda, Toyota, Skoda and VW all depend much on the local currency value. The Japanese Yen hits the market heavily with its rise in the last 14 years affecting the prospects of import, said the VP of Honda Siel. A relief to the customers is that the price will not be heavy on their shoulders.