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Wednesday, May 21, 2008

Hyundai India Announced Price Hike by 2 Percent

Hyundai Motor India Ltd has announced a 2 percent increase in the prices of all of its models in Indian market. The announcement came just two days after Maruti Suzuki India Ltd (BOM:532500), the largest car maker of Indian car market, declared price hike in its vehicles. Hyundai Motor Company (SEO:005380) is the second largest auto maker in the domestic market.

As per the announcement of Hyundai, the increase in prices would range from Rs 5200 to Rs. 32,200, which is a bit more than Maruti Suzuki’s hike ranging Rs 1000-18,000. Auto makers are increasing the price hikes in order to cope up with the increasing prices of input materials like steel, copper, plastic and rubber.

Hindustan Times reported:

Hyundai's hike would range between Rs 5200 and Rs. 32,200 as compared to increases of Rs 1000-18,000 announced by Maruti.

“There has been an increase of diverse magnitudes across a variety of our inputs like steel, copper, plastic and rubber. We have been absorbing it for sometime now, but (now) we have decided to pass on some of it to consumers,” said Arvind Saxena, senior vice president at HMIL.

Some other major companies of Indian market like Mahindra and Mahindra and Honda Siel Cars India also announced its price hike. Recently, General Motors said it would announce the new prices by the end this month, while Tata Motors, another major player of the market, is yet to decide over the matter.

Well, hike in car prices is being experienced in some other car markets as well thanks to the consistent increase in its input materials. The producers of Steel are now calling for 30 percent more for long term contracts, while the price of aluminium has gone upward by 25 percent since last January. So, car makers can not help but increasing the prices of its models in order to assimilate with the price hike in the input materials. Now, let us see if such price hike affects car sales in Indian car market.

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