Commercial vehicle and passenger vehicle market leaders Tata Motors and Maruti Suzuki India (MSIL) have announced price hikes for their vehicle range from April, citing rising input costs and operational expenses.
While MSIL car prices will go up by up to 4 per cent, Tata Motors CVs will cost up to 2 per cent more.
Industry insiders found the rise in PV prices surprising.
This price hike is surprising, as the supply chain for PVs has largely stabilised, and we havent seen any major disruptions. While rising input costs and operational expenses are cited as reasons, this is a standard response from original equipment manufacturers. The market is maturing, and with a modest 1.3 per cent growth forecast, achieving higher growth will likely depend on new model launches rather than price hikes. CVs remain under pressure, with full recovery yet to happen. Price increases might dampen market sentiment rather than drive growth, said Manish Raj Singhania, chairman of Fada Academy & Research.
MSIL said in a regulatory filing that the price hike will vary depending on the model.
'In light of rising input costs and operational expenses, the company has planned to increase the prices of its cars from April 2025, the company said in the exchange filing. While the company continuously strives to optimise costs and minimise the impact on its customers, some portion of the increased cost may need to be passed on to the market.'
Meanwhile, Tata Motors announced a price increase of up to 2 per cent across its CV range, effective April 1. Tata Motors explained that the price hike is necessary to offset the rise in input costs and will vary according to individual models and variants. 'The price increase is to offset the rise in input costs and will vary as per individual models and variants,' said the official press release.
This is the second price increase by Tata Motors for its CVs, as the first price hike of 2 per cent came in January.
Despite these price adjustments, the overall outlook for the CV industry remains positive.
Credit rating agency Icra expects the domestic CV industrys wholesale volumes to witness year-on-year growth of 3 to 5 per cent in 2025-2026 (FY26). This follows a period of flat volume movement estimated in 2024-2025 (FY25), which was impacted by a demand slowdown in the first half of the financial year due to the general elections.
Potential drivers for this growth include the resumption of construction and infrastructure activities, steady rural demand, higher replacement sales stemming from ageing fleet, and government mandates, which are likely to propel volume expansion toward the end of FY25 and through FY26.
Anjali Singh, Business Standard
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