One of the largest auto manufacturers in India, Tata Motors, has announced a price hike for its passenger vehicles. The new hike will be applicable for all cars starting on May 1, 2023.
Defining the quantum of increase, the company said that the model and the car’s variant will determine the price changes. However, the cars will have an average increase of 0.6 percent. The company cited increased input costs and regulatory changes as the reason for the price hike of the vehicles in India.
“Tata Motors has been absorbing a significant portion of the increased costs on account of regulatory changes and rise in overall input costs and is therefore compelled to pass on some proportion through this hike,” the company stated in a statement.
How’s Your Favourite Tata Motors Car New Price Look Like:
- As a result, the Indian automaker’s Tata Nexon, Harrier, Safari, Tiago, Tigor, Punch, and Altroz models will increase in price.
- The company will announce the new prices for these vehicles in the coming month.
- The price of the vehicles will increase anywhere from Rs 3,000 to Rs 15,000 based on the current announcement.
- The Tata Safari’s most expensive model, which costs approximately Rs 25 lakh (ex-showroom), may be eligible for the maximum increase.
Commodity Prices and Manufacturing Costs
Differentiating prices based on product portfolio, and market demand is standard practice. This lets automakers optimize their revenues and maintain a competitive edge in the market. Despite absorbing a significant portion of the increased costs, I compelled Tata Motors to pass on some proportion of these costs through the price hike due to the rise in overall input costs and regulatory changes.
Electric Vehicles: The New Pricing
Tata Motors’ decision to increase its vehicle prices is not unique to the company but is an industry-wide practice. The constant rise in costs puts pressure on margins, and automakers must continuously innovate and improve their products while monitoring profitability. Therefore, they periodically review their pricing strategies to ensure that they remain competitive while maintaining a profit margin.
Company’s New Policy
- Rising input costs and changing regulations have been the primary drivers behind price hikes.
- But it also puts focus on the need for auto manufacturers to continuously innovate and improve their products while maintaining products.
- The company had previously announced a price increase for automobiles in February. On April 1, 2023, the increased prices went into effect.
- At that point, the organization said that the costs were expanded because of the execution of stricter discharge standards. In addition, the Indian automaker upgraded its vehicles to meet BS6 Phase II emission standards.
Challenges:
The impacts of the rising information expenses and execution of stricter discharge standards have been steady throughout the Indian car industry. The prices of automobiles from several manufacturers, including Hyundai, Honda, Maruti Suzuki, and others, increased.