Maruti Will Again Hike Price From This Date: 4th Price Hike In 12 Months! (But Why?)

Citing a rise in input costs, Maruti Suzuki has announced a price hike set to take effect in January 2022.

The price increase will vary for different models but no details have been given yet regarding that or the quantum of the hike.

Another Month, Another Hike

This is the fourth hike in the last one year, with the previous ones announced in March, July and September.

It increased prices by 1.4 per cent in January, 1.6 per cent in April and 1.9 per cent in September, taking the total quantum to 4.9 per cent.

MSI Senior Executive Director (Marketing and Sales) Shashank Srivastava said that the company’s total price hike of 4.9 per cent is “actually lower than the impact” they are witnessing due to high commodity prices.

Rise In Input Costs To Blame

The carmaker said that the costs of its cars have been hit due to “increase in various input costs”.

Srivastava explained that material costs typically account for 70-75 per cent of the total cost to the manufacturer.

This material cost to net sales ratio shot up to 80.5 per cent in the second quarter, which he notes as unprecedented.

As a result, they have been forced to pass on some of the burden to customers through a price hike.

 Net Profit Plunges

The company reported a 66 per cent year-on-year (y-o-y) decline in net profit for the quarter ended-September 30.

It earned net profit to ?487 crore compared with a net profit of ?1,419 crore in the corresponding period last year.

It said that it had tried to minimise the impact of rise in costs of commodities like steel, aluminium and precious metals on its customers.

But in doing so, its net profitability took a hit.

Production Capacity Hindered

Another adverse effect of the ongoing semiconductor shortage has been on the company’s vehicle production capacity.

It is projected to fall between 80-85 percent of its normal capacity this month at two of its manufacturing locations in the country.

This production warning is the third one in less than six months, having flagged similar output falls in September and October.