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Auto companies hike prices by Rs 15-20k on BS6 phase-2



CHENNAI: With the BS6 phase-2 transition just round the corner, auto industry is gearing up for another round of price hikes. According to sources in the industry, the hikes this time round will be in the region of around 2-4% or roughly Rs 15,000-20,000 depending on make and model. While passenger vehicle companies like Maruti, Mahindra & Mahindra, Honda, MG, Kia, Tata Motors and others are already working on the quantum and date of the hike, even commercial vehicle players are announcing around 5% increase in prices.
Said Rajeev Chaba, president & MD, MG Motor India: “Price increases are happening on account of BS6 phase II as we speak and depending on the launch calander OEMs have started doing it already ranging from 2-4%.” Companies like Tata Motors and Kia announced price hikes on Tuesday. For Kia the increase is around 2.5% for its RDE compliant and E20 fuel compatible line-up of Seltos, Sonet and Carens.
Dealer sources say M&M has already indicated a price hike of around Rs 20,000 on its range though details of the increase are yet to be formally announced by the company. In the case of Maruti, while some models and variants have already transitioned to RDE and E20 compliant specs, for the others the hikes will be in the region of 2-4% said dealer sources. Similarly, while Honda has just launched its new City, for the other models there will be price increase from April to factor in the transition to BS6 phase II, said company officials.
As for Tata Motors,, which announced a price hike of up to 5% on its commercial vehicles on Tuesday, the passenger vehicle range has already transitioned to BS6 Phase II in February. “Part of the cost escalation arising out of this regulatory change has partially been passed on in the price increase announced in February (around 1.2% hike) and the remaining part may be passed on in the next price hike,” said a Tata Motors spokesperson. Apart from Tata Motors, Ashok Leyland is also mulling a round of price hikes though it has not yet taken a timeline call on the matter, said a company spokesman.
The price hike will be steepest for luxury car companies even though most of these models are already RDE compliant. In the luxe space it is forex and input costs that are playing spoilsport. Mercedes Benz India for instance is hiking prices due to forex and input costs by upto 5% with effect from April 1. Others like Lexus are in watch mode. Said Naveen Soni, president, Lexus India: “Our vehicles are already BS6 phase II compliant hence that will not lead to an increase in prices. We are monitoring the situation closely in relation to the exchange rate, material and shipping cost inflation and we want to minimize any cost transfer to the customer unless it becomes imperative.”


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