Mahindra rates up to 3% price increase as steel prices rise rapidly
Indian auto giant Mahindra & Mahindra (M&M) is closely monitoring the recent rise in commodity prices. The price of steel is rising rapidly and with the fact that steel is widely used as a raw material for the manufacture of vehicles, the automaker is monitoring developments. Based on this, the automaker will take action to protect its business.
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Mahindra cars are likely to become more expensive by up to 3%. The price increase will be between 1.8% and 3%, depending on the models and variants, as general manager of M&M (automotive division) Veejay Nakra told PTI.
Due to the surge in raw material prices, other automakers such as Tata Motors and Maruti Suzuki India have already announced price increases in an attempt to offset the impact of rising input costs. Tata Motors cars became more expensive by up to 1.8% under the last price revision. Maruti Suzuki cars are also more expensive up to ₹22,500 according to the latest price revision announced by the automobile brand.
Domestic steel producers increased the prices of hot-rolled coil (HRC) and cold-rolled coil (CRC) by ₹4000 and ₹4,500 per tonne respectively in the last few days. HRC and CRC are also widely used in the manufacture of automotive and automotive components. With the price revision, now a ton of HRC costs ₹67000, while the ton of CRC costs ₹80,000. The price of HRC and CRC could be increased again in mid-May or early June 2021.
Speaking about the surge in commodity prices and the possibility of Mahindra vehicle prices rising, Veejay Nakra said the local automaker uses several levers to manage its costs. He said the company is always trying to mitigate increases in commodity prices through internal cost measures, whether on the cost of materials through value engineering or by managing our fixed costs.
Earlier this year, in mid-April, Mahindra already announced a price hike decision due to the rise in commodity prices over the past two months which has resulted in higher input costs. “In the future, we will closely monitor the evolution of the prices of raw materials and take the appropriate measures accordingly,” he added, referring to the possible rise in prices to come.