Ashok Leyland may hike commercial vehicle prices

Hinduja Group flagship company Ashok Leyland is likely to increase prices of its commercial vehicles across all models by April 2010 to offset rising input costs.

The company cited hike in steel prices, changes in technical specifications due to new emission norms and fixed price contracts with local transport bodies for delivery of vehicles as the main reasons for the likely raise in prices.

"Steel prices are moving up and at the same time we are also facing increasing cost associated with technology due to the emission requirements. The costs have to be passed on to the consumers," Ashok Leyland executive director (marketing) Rajiv Saharia told reporters.

Regarding the likely quantum of price increase, he said: "It would vary, depending on the vehicle and models. However, it is likely to be across all models."

Saharia, however, said the price hike would happen only after this fiscal when new emission norms come into play under which all vehicles in 11 major cities across the country would need to mandatory Bharat Stage (BS) IV compliant engines, while other cities would move from BS II to BS III.

The company was also under pressure as rising input costs have led to fall of margin for the vehicles it plans to deliver to the Delhi transport corporation and other local bodies under the Jawaharlal Nehru national urban renewal mission.