After announcement of price increase by Honda India, Mahindra, Tata and Renault India, now Maruti Suzuki, Hyundai and Ford also eyes similar trend to follow. Each car manufacturers are under pressure of maintaining margin and selling good number while industry is facing tough time.
Last month Government reduces the excise duty, car makers pass these benefits to the customers, but though sales did not gear up responding to the benefits. On other hand car makers remain at critical margin at lower sale volume. The car makers says that their operating costs have also gone up due to increase in fuel prices and other overheads. Mr. MayankPareek, COO for Marketing and Sale at Maruti said “As we enter into a new fiscal year, we are closely looking at the cost pressures.”
While Mr. Pravin Shah, CEO Mahindra Automotive Division said, “We have witnessed a sharp increase in operating costs, and there is huge pressure on margins.” And Mr. Rakesh Srivastava, Senior VP of Marketing and Sales said that we have “Considered view to go in for a hike as a number of factors are affecting our profitability”
As we stated earlier in this article, auto makers failed to attract customers, despite reduction in price last month. The total vehicle sales including cars, vans and utility vehicles drop 4 percent to 2.17 lakh units in February.
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