Reputed car manufacturers in India are in turmoil with the drastic impact on car economy which is on an all time low which has led companies to act quickly and work out methods to fight lower sale outputs, rupee depreciation and price hikes. Hyundai is of the view that drastic shift in economy has caused certain amount of pressure to the company. The weakening of Indian rupee is an additional source of pressure; the company announced that it is analyzing effective strategies to garner positive sale outcomes.
Mahindra and Mahindra highly appreciated for its Sport Utility Vehicles (SUV’s) along with General Motors have increased the cost of some of their models. Hyundai and Maruti Suzuki have not concluded on their plan to overcome rupee depreciation, Hyundai might chalk out schemes to heighten its sale image.
Auto firms have stated that the product prices on a global level have decrease, but this is not a positive outcome since there are other strong factors that are causing growth hindrance such as rupee depreciation. There are other factors as well such as lower fuel values, weakening Indian rupee, inflation, high interest values; low growth which has caused an element of worry among car companies. There has actually been an increase in raw commodity costs. There trends have been on the rise for the last ten months.
According to General Motors, the increase in costs is caused by logistic cost factor, and does not expect the situation to reverse in the near future. Mahindra and Mahindra have raised the values of its models which do not include Rexton and XUV, the company has increased prices by Rs 3,000-6,000 in July 2013. General Motors have increased their prices at 1.5% last month with some of its quality models of Beat, Tavera and Spark with a raise from Rs 5,000-10,000. The utility car prices have encountered decent increases at Rs 10,000. A company official of Maruti Suzuki announced that the firm is still in the deciding phase about price increases.
In the luxury vehicle segment, eminent firms such as Audi will raise its prices within a month; Mercedes Benz is working on a similar situation as well. Nissan and Tata Motors are not aiming to increase values of their cars. Nissan Indian has announced that it employs indigenization practices that has enabled to tide away from weakening rupee value.
With other established firms working on methods to fight significant factors to drive away rupee depreciation, Hyundai is yet to decide on a strategy. The company is a dominant figure in India in the passenger and luxury car segment. Some of its popular models in India are the Santro, i10, i20, Verna and so on. Hyundai is working on the 2015 i20. There features of this car have been published in car magazines and commercials. The Cast a spell commercial is a huge hit, the advertisement is executed impressively to showcase the impact of i20 among the Indian population.
It would be interesting to observe the company’s future products and methods to fight rupee depreciation.