Honda to raise car prices this week

Rising input costs is the primary reason

Honda Cars, the country’s fourth largest passenger vehicle maker, will announce a price increase this week for most of its products. It will follow the top two in the segment, Maruti Suzuki and Hyundai, which announced a price rise earlier this month.

It is likely to be a rise of one to two per cent. “The main driver is an increase in costs. The weakening rupee is also a factor. We are evaluating the increase that is required”, said Jnaneswar Sen, senior vice-president (marketing & sales) at Honda Cars India.

Indian subsidiary of the Japanese car maker, it sells six products here — the City, Jazz, Amaze, Brio, Mobilio and CR-V.

Asked if the increase would also apply to the Jazz, relaunched only last month, Sen said the company was still to decide. Maruti and Hyundai did not increase the price for their new products, the S-Cross and Creta, in the recent rise.

Honda sold 189,062 vehicles over 2014-15 in the Indian market. In the April-July period this year, it sold a little over 63,000 cars, about 12 per cent more than in the same period a year before.

The largest in the segment, Maruti Suzuki, raised prices by Rs 3,000 to Rs 9,000 across products, barring the S-Cross, with effect from August 11. The reason was a combination of increase in dealer margins and costs. The increase came after nearly two years. Hyundai, the second largest, had raised prices by up to Rs 30,000 on all products except the new sports utility vehicle, Creta, from August 1, citing an increase in pressure from rising input costs.

Interestingly, the sales volumes of these three have been growing at double-digit rates this year, higher than the industry average. This and the coming high-demand festive season is giving the companies enough confidence that the market will absorb higher prices.