Tata Motors Hikes the Prices of its entire passenger vehicle range starting next week due to a steep increase in essential procurement costs. According to a top company official, steel and precious metals are used.
The Mumbai-based automaker sells a variety of passenger vehicles in the domestic market, including the Tiago, Nexon, Harrier, and Safari.
After an increase in input costs, Tata Motors NSE 0.36 percent announced Monday that it plans to raise the prices of its passenger vehicle lineup. The automaker did not provide a specific time frame for the price increase, but said it would occur “shortly.”
Tata Motors said in a statement that it intends to raise prices on its cars and SUVs in the near future as necessary.
As a result of rising input costs, including steel and precious metals, at least a portion of this increase must be passed on to customers, the report said.
An official announcement about the price increase is expected within a few days or weeks, according to the company’s statement.
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“Over the past year, steel and precious metals prices have risen dramatically. Shailesh Chandra, president of Tata Motors Passenger Vehicle Business Unit, told PTI that the increase in commodity prices has cost the company 8 to 8 1/2 percent of its revenues over the past year.
Only a small portion of the increase in input costs has been passed on to customers so far, he said.
In terms of the actual value of the company, we’ve transferred only 2.5 percent. There is a big difference between the increase in input costs that have occurred and what we are able to pass on to the market, Chandra said.
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In industries such as auto, appliances, and construction, HRC and CRC flat steel products are used. Each steel price hike has a ripple effect on automobiles, consumer products, and construction costs.
Apart from that, the cost of production has increased due to the price increase of precious metals like rhodium and palladium. In the catalytic converters, rhodium and palladium are used, and their demand has risen dramatically as a result of stricter emission standards around the world.21
Initial price increases of 1.8 percent, depending on model and variants were implemented in early May by the domestic automaker to partially offset the rise in input costs.