The New Car Just Got Costlier, Overall Prices To Be Hiked From January 2024 To Offset Inflation, Maruti Suzuki Price Hike Across Models

New car and SUV prices are set to increase starting January 2024; leading from the front, Maruti Suzuki has announced a price hike across its various models. The increase, amounting to approximately 0.45%, is attributed to rising cost pressures driven by overall inflation and increased commodity prices.

The revised prices will take effect from January 16, 2024. Maruti Suzuki provided insight into the price hike, stating, “An estimated weighted average of the increase across models stands at around 0.45%. This indicative figure is calculated using Ex Showroom prices of models in Delhi and will come into effect from 16th January 2024,” as per the company’s communication to the stock exchange.

As of 11:25 am, Maruti Suzuki’s shares were trading with gains of about 1.5%, while the benchmark indices showed muted trading with a positive bias.

This decision to raise prices comes after Maruti Suzuki had previously communicated its intention to do so in November.

At that time, the company stated, “The Company has planned to increase the prices of its cars in January 2024 on account of increased cost pressure driven by overall inflation and increased commodity prices. While the Company makes maximum efforts to reduce cost and offset the increase, it may have to pass on some increase to the market.”

In a similar move, Tata Motors had also announced a price hike for its commercial vehicle models starting January 2024 to offset the residual impact of past input costs. The commercial range affected includes popular models like Tata Ace, Tata Intra, and Tata Winger.

Mahindra & Mahindra, along with Honda Cars India and luxury car dealer Audi, had also increased prices earlier this month for similar reasons.

Maruti Suzuki India reported a 1.28% decrease in overall sales in December 2023, with 1,37,551 units sold compared to 1,39,347 units in the same month of the previous year.

Domestic sales, encompassing passenger cars, commercial vehicles, and third-party supplies, were 1,10,667 units in December 2023, reflecting a 5.86% decline from the 1,17,551 units recorded in the corresponding period last year, according to a statement from Maruti Suzuki India.

Rising Prices Amid New Plant Construction
Notably, Maruti Suzuki, India’s leading automaker, is set to invest $4.2 billion in constructing a second car plant in the state of Gujarat, in addition to introducing a new production line at an existing facility, as revealed by the president of its parent company.

These strategic investments aim to substantially increase the company’s annual production capacity in Prime Minister Narendra Modi’s home state from the current 750,000 vehicles to 2 million.

The new production line is anticipated to commence operations in the 2027 financial year, with the second plant expected to follow about two years later.

Maruti Suzuki, renowned for its popular Swift hatchback, has expressed its ambition to double the annual production capacity to 4 million units by the 2031 financial year.

The announcement of these expansion plans took place during the Vibrant Gujarat Global Summit, a three-day biennial event that attracts numerous chief executives, investors, and diplomats.

Toshihiro Suzuki, the president of Japan’s Suzuki Motor, also disclosed that the group’s initial battery electric vehicle (EV) will be manufactured at Maruti’s existing Gujarat plant by the year’s end.

This EV, besides being sold domestically and in Europe, will mark a significant milestone as Maruti ventures into exporting vehicles to Japan for the first time, extending its reach to its parent company’s home country.

Maruti, boasting a market share exceeding 40% in the world’s third-largest auto market, aims to introduce six EV models by 2030.

Highlighting Maruti’s remarkable progress, Suzuki emphasized, “It is noteworthy that as compared to 10 years ago, we expect 1.7 times in vehicle production and 2.6 times in export sales in the current fiscal year,” underscoring the company’s substantial growth over the past decade.

So, what does the price hike look like for major auto brands?

Auto manufacturers are implementing price increases, attributing them to the escalating costs of commodities, particularly steel.

Audi – German luxury brand Audi has declared a uniform 2 percent price hike across its model range, encompassing A4, A6, A8 L sedans, Q3, Q3 Sportback, Q5, Q7, Q8 SUVs, S5 Sportback sportscar, and electric models like Q8 e-tron, Q8 Sportback e-tron, and e-tron GT.

Maruti Suzuki – India’s largest carmaker, Maruti Suzuki, cites rising production costs as the reason for varying price increases across its diverse model lineup, which includes popular vehicles like Alto, Baleno, Brezza, Celerio, and more.

Mahindra – Mahindra has announced its intention to raise vehicle prices from January 2024, citing inflation and increased commodity costs. Specific details about the extent of the price hike will be disclosed later. Mahindra’s current portfolio includes XUV300, XUV700, Bolero, Scorpio, Marazzo, Thar, and others.

Tata Motors – Tata Motors plans to raise prices for its passenger vehicles, including the EV range. While exact details are pending, the brand’s lineup features Altroz, Harrier, Nexon, Safari, and various electric models.

Honda – Honda India is set to increase prices for all four-wheelers from January 2024 due to rising production costs. The precise amount of the hike will be disclosed by month-end. Honda’s current offerings in India include the City, Amaze, and the Elevate SUV.

MG – in collaboration with the JSW group, will raise prices across its models from January 2024, citing increased production costs. Details of the price hike are yet to be shared. MG’s current lineup in India comprises the Comet EV, ZS EV, Hector, Astor, and Gloster.

Hyundai – Hyundai India has announced a price hike for all its vehicles from January 1, 2024, attributing it to rising input costs and exchange rates. The extent of the price increase remains undisclosed. Hyundai’s product range includes Alcazar, Creta, i20, Venue, and others.

BMW – India plans a 2 percent price hike across its model range from January 1, 2024, citing rising input costs. The lineup includes 2 Series Gran Coupe, 3 Series, 5 Series, X1, X3, and various electric models.

Citroen – India will raise prices by 2.5-3 percent across its model range from January 1, 2024, citing various market factors. The current lineup includes C3, eC3, C3 Aircross, and C5 Aircross.

Volkswagen – India will implement a uniform 2 percent price hike across its model range, including Taigun, Tiguan, and Virtus, from January 1, 2024, due to rising commodity costs.

Skoda – will raise the price of its models by 2 percent from January 1, 2024, citing increasing commodity costs. Skoda’s current offerings in India include Slavia sedan, Kushaq, and Kodiaq SUVs.

Mercedes-Benz – Luxury carmaker Mercedes-Benz will hike prices of select models by up to 2 percent from January 1, 2024. While specific models remain unspecified, the increase will range from Rs. 2.6 lakhs for the GLS SUV to Rs. 3.4 lakhs for the top-end Mercedes-Maybach S 680.

Volvo – will implement a 2 percent price hike across its lineup in India from January 1, 2024. The current portfolio includes C40 Recharge, XC40 Recharge, XC90, XC60, and S90.

Nissan – India will increase the price of the Magnite SUV from January 1, 2024, citing rising input costs and inflation.

Will The Consumers/ Buyers Be Affected?
The likelihood of consumers spending more in the current prevailing situation, marked by geopolitical tensions, trade wars, and the Red Sea tensions, depends on various factors that impact their confidence, economic stability, and disposable income.

If geopolitical tensions escalate and create uncertainty, consumers may become more cautious about their spending and elevated concerns about the stability of global affairs can lead to a decrease in consumer confidence.

Similarly, Geopolitical tensions, trade wars, and regional conflicts can have a ripple effect on the global economy.
Economic downturns or uncertainties often result in reduced consumer spending as individuals prioritize saving and financial security.

Trade wars and geopolitical tensions, for example, the current situation in the Red Sea, which is a major trade route, may contribute to inflationary pressures, affecting the prices of goods and services.

Also contributing to these factors is the uncertainty at the job front as leading companies continue to layoff or restrategize with emerging new technologies such as generative AI, perhaps leading to many more layoffs in 2024.