Starting April 2025, car prices in India will increase as leading automakers, including Maruti Suzuki, Hyundai, Tata Motors, and Mahindra & Mahindra, announce price hikes. The decision comes in response to rising input costs, inflation, and operational expenses.
Maruti Suzuki, the country’s top passenger car manufacturer, plans to raise prices across its entire model range by up to 4%. Hyundai Motor India will implement a price increase of up to 3%, while Mahindra & Mahindra will raise prices for its SUVs and commercial vehicles by a similar margin. Tata Motors is also set to hike prices on its passenger and electric vehicle range.
Other automakers, such as Kia India, Honda Cars India, Renault India, and BMW, have also announced price increases starting next month.
Reasons Behind the Price Hike
Industry experts highlight multiple factors contributing to the price hikes. Deloitte Partner & Automotive Sector Leader Rajat Mahajan explained that automakers typically adjust prices twice a year, once at the beginning of the calendar year and again at the start of the financial year.
Mahajan noted that currency fluctuations play a key role, as the US dollar has strengthened by nearly 3% against the Indian rupee in the past six months. This increase raises import costs for components and raw materials, impacting car prices.
Additionally, the rising cost of adding advanced features to vehicles and inflationary pressures have further contributed to price adjustments.
Impact on Consumers and Demand
Icra Corporate Ratings Vice President Rohan Kanwar Gupta stated that these price hikes are meant to offset increasing operational and commodity costs. While higher prices might slightly impact demand, the auto industry is already offering discounts to balance the market and reduce inventory levels.
Experts suggest that automakers will be cautious with price increases, especially in the entry-level segment, to avoid discouraging first-time buyers and rural consumers. However, premium segments are less price-sensitive, meaning automakers may see better margins despite the hikes.
Despite the planned increases, the overall impact on demand is expected to be moderate, given the existing discounts and incentives in the market.
