India's biggest passenger vehicle manufacturer Maruti Suzuki Ltd has decided to increase prices across its entire range of vehicles starting January 2023. The company says it continues to see increased cost pressure driven by overall inflation and recent changes in rules by the government.
"The company continues to witness increased cost pressure driven by overall inflation and recent regulatory requirements. While the company makes the maximum effort to reduce costs and partially offset the increase, it has become imperative to pass on some of the impacts through a price increase. The Company has planned this price increase in January 2023 which shall vary across models," Maruti said in an exchange filing today.
Maruti has not revealed how much it plans to increase prices by. Maruti holds about 40% of the market share in India's passenger vehicle market. Before this, Maruti had hiked prices of its popular hatchback models like Swift and all CNG variants as input costs continue to put pressure. The company increased PV prices by around 8% from January 2021 to March 2022 as commodities became costlier.
In November, the market leader sold a total of 1,32,395 passenger vehicles in India, up 20.6% from 1,09,726 sold in the year-ago period. Including light commercial vehicles, its total sale grew 19.4% YoY to 1.35 lakh. The cumulative sales, including sales to OEMs and exports, stood at 1.59 lakh units, a 14% YoY rise compared to 1.39 lakh units sold a year before. During the festive period in October 2022, Maruti Suzuki sold 1,40,337 PV units in October 2022.
With continued growth, improved supply-chain issues and rapid demand, the PV sector led by Maruti is well on the course towards recovery. The automotive industry saw its best festive season in four years this year as customers for every segment stepped out in droves to partake in festive purchases.
The PV industry’s wholesale volumes may touch an all-time high of 3.7 million units in FY23, a growth of 21.24% compared to the last fiscal, thanks to the robust demand, the ratings agency ICRA says. It says market leader Maruti Suzuki could add one lakh units of passenger vehicles in its capacity by the end of FY24, and 2.5 lakh units of PV units by the end of FY25 at an outlay of ₹7,000 crore in FY2023.
In sync with the rising demand, Maruti is also planning a short-term ramp-up of capacity at its plant in Manesar. The ramp-up—which could be realised by April 2024—is expected to act as a stopgap measure until its newest facility at Kharkhoda, near Sonipat, is ready for production.
Maruti's net profit jumped more than fourfold to ₹2,061.5 crore during the July-September quarter, compared with ₹475.3 crore in the corresponding period last year. Revenue from operations grew around 46% year-on-year to ₹29,931 crore for the quarter ended in September, with the company selling a total of 517,395 vehicles during the quarter. In the domestic market, Maruti sold 454,200 units and exported 63,195 PVs.