If you are among the ones saving up and planning to buy a car in 2016, you might have to rethink your plans and get it fast tracked soon. All the car companies in India have given out a statement that they will be increasing the cost of their cars by up to INR 20,000/- to INR 30,000/- depending on the companies and the models. The reason for this is being stated as to offset the rising input cost and the unfavorable fluctuations of the Indian Rupee against the Dollar. This is coming out as a big step across all the manufacturers in the country and seems like it could be a serious issue after all.
“GM India will increase prices of locally built Chevrolet vehicles by up to two per cent with effect from January depending upon various models and variants, in order to partially offset rising input costs and foreign exchange fluctuations,” a company official said. Also similarly Nissan and Datsun brands have already declared a fare hike along with Hyundai and Maruti Suzuki. Tata Motors are also in the fray while there has been no word from Honda about it.
But following the natural trend, we are expecting the entire Auto sector to hike prices including the two wheeler markets and the commercial vehicles division as well. One huge impact this is going to have is to the luxury cars market. Even with a figure as small as 2-3% the increase in cost will be massive and this will be taking tolls on the cars sales in due time.
One sector that might have a lot of profit with this move would be the finance sector as the cost of loans will increase; the overall interest returns on the loans will also increase substantially. This is some good news for the money flow to the country’s economy but from a consumer point of view, it is really bad news.
Some experts have even touted this to be a marketing move by the entire auto sector so as to clear out all the stock off the shelves that they had for the festive season. This will help the companies to stock up on the fresh produce off the factory floors for the New Year.
Another silver lining this could have is there will be a considerable but not a huge decline in the sales of the cars overall in the country. This might not sound that good news for the auto sector, but the overall environmental impact that we are seeing these days; it could go a long way in helping that.
But overall the government should take notice of the situation and work on a solution for this as automobile sector is a huge contributor to the nation’s economy and this could be a huge setback for it as a whole.