With the start of the new financial year, car prices are going to weigh on the wallets of prospective car buyers. Thanks to the rise in input costs and expenses for complying with new emission norms, market leader Maruti Suzuki has increased the prices of its different variants by 1-3%. Others like Tata Motors, Fiat, Hyundai, Mahindra & Mahindra and General Motors too have indicated a price rise but are non-committal on the quantum. Given that RBI has already increased policy rates and expectations are that rates will only head north post the annual monetary policy meet, the big question is how will customers react to this price hike?
Automakers expect there will be a slight pullback in demand. They believe customers had advanced their purchase decisions (keeping in mind the budget announcements) and also had wanted to take advantage of the lower interest rates offered by the banks before the interest rates graph headed north.
This was evident by the increased sales – 33% alone in Feb 2010. So if you were planning to buy a car and were postponing the decision till now, our call – rush!
For more articles, Click on IIPM Article.Automakers expect there will be a slight pullback in demand. They believe customers had advanced their purchase decisions (keeping in mind the budget announcements) and also had wanted to take advantage of the lower interest rates offered by the banks before the interest rates graph headed north.
This was evident by the increased sales – 33% alone in Feb 2010. So if you were planning to buy a car and were postponing the decision till now, our call – rush!
Avneesh Singh
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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