Hyundai to increase car prices by up to Rs 25,000 amid rising costs

Hyundai Motor India (HMIL) on Thursday announced a price hike of up to Rs 25,000 across its model range, effective January 1, 2025.

 

The adjustment is attributed to escalating input costs, unfavorable exchange rates, and higher logistics expenses. The revised pricing will apply to all models from the MY25 lineup.

 

Tarun Garg, whole-time director and chief operating officer, HMIL, said: “At Hyundai Motor India, our endeavour is always to absorb rising costs to the extent possible, ensuring minimal impact on our customers. However, with the sustained increase in input costs, it has now become imperative to pass on a part of this cost escalation through a minor price adjustment.”

 

 

The decision comes as the auto industry grapples with rising expenses across key components and commodities.

 

Prices of aluminum, a major input for automobile manufacturing widely used for engine parts and lightweight vehicle frames, have seen a year-on-year increase of around 10.6 per cent.

 

The prices of zinc, tin and copper have surged by 16.5 per cent, 13.3 per cent and 5.3 paper cent respectively. Rubber prices have also increased by about 26.8 per cent due to constrained global supplies according to Bloomberg data.

 

The impact of these cost pressures is compounded by elevated logistics expenses.

 

A disruption in global shipping routes, particularly along the Red Sea, has resulted in an increase in container rates in 2024 compared to the previous year.

 

Additionally, the adverse currency movements have further inflated the cost of imported components.

 

Hyundai’s price hike aligns with broader industry trends, as automakers and suppliers brace for a challenging financial year.

 

According to a recent report by Icra, the Indian auto component industry is expected to witness a moderation in revenue growth to 5-7 per cent in FY2025, down from the 14 per cent growth in FY2024.

 

Operating margins are projected to improve by a modest 50 basis points, aided by better operational efficiencies and higher value additions.

 

The industry is also preparing for investments in capacity expansion and technological advancements. Icra estimates a capex of Rs 20,000–25,000 crore in FY2025, with a significant portion directed toward developing electric vehicle (EV) components and advanced technologies.