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March 24, 2001
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Money > Business Headlines > Report March 24, 2001 |
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Maruti to up price tag by 2-3%BS Corporate Bureau Maruti Udyog (MUL) plans to increase the prices of all its models by around 2-3 per cent from April 1. This means that while prices of the three versions of Maruti 800 may go up by around Rs 4000-5000, bigger cars like Esteem and Baleno may cost Rs 15,000-23,000 more. According to sources, though the exact price hike to be affected on each model has not yet been decided, the company has taken a firm decision to increase the prices. "In fact, Maruti may not increase the prices of all its models, and may leave out some versions of existing models," a source said. The source cite continued cost pressures as the reason behind the increase in prices. "We have been increasing the prices in phases since October last year. A sudden price hike of all models would have affected sales adversely," the source said. This will be the sixth time in the span of one year that Maruti would be revising the prices. After increasing the prices of its cars in May last year due to the increase in sales tax, the company had slashed prices of some of its models (such as Maruti 800, Omni and WagonR) in July. It had cut the price of Maruti 800 Standard (MPFI version) by Rs 20,000 in July. In October, the company increased the prices of its models such as Maruti 800. Again in January, Maruti affected a hiked price by Rs 2,000 to over Rs 12,000. Maruti had slashed its car prices by Rs 11,000-42,000 on February 28, following the eight per cent excise duty cut announced in the Union Budget. "The cut in excise duty on cars does not affect the cost and revenue structure of companies. And an increase in prices of cars was due," the source added. MUL, in fact, did not want to affect a price increase around the Budget time, since it would have appeared as if the company did not pass on the entire benefit of the excise duty cut to the customer, the source said. Maruti's cumulative sales (April-February 2000-01) fell by 14.4 per cent to 305,000 units from 355,000 units during the same period last fiscal. The industry's cumulative car sales fell by seven per cent at 525,000 units against 565,000 units during the same period in the last financial year.
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