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Car Prices to Increase again as Rupee Depreciated to 70 against Dollar

Car Prices to Increase again as Rupee Depreciated to 70 against Dollar

Car Prices set to Increase Once again in September, October 2018 in India due to Depreciating Rupee to Record Levels of 70 against Dollar. Add on to woes is Rising Interest Rates

 

Depreciating Rupee Impact: Car Prices set to Increase again in September, October 2018

Car prices are set to increase due to records highs of depreciating rupee against dollar, For the first time in the history of Indian currency rupees has breached mark of Rs 70 against a dollar.

Although the car manufacturers have increased the prices in recent months, but due to depreciation of rupee By 2.5 percent from August 1 to 17th August and Industry experts predicting Rupee to even touch levels of Rs 72 per Dollar, can witness in huge pressure on Margins of Car Manufacturers in India

Needless to mention that Import of Parts from Japan by Maruti Suzuki, Honda, Toyota, Nissan and from Europe by Volkswagen, Skoda, Renault and in similar way by other car makers Hyundai, Ford, BMW, Mercedes, Audi, Volvo is going to impact in margins. Even Tata Motors, Mahindra also do not have 100% Localization and a small 2% of parts are imported

If Rupee continue to fall then a price hike may well be announced in September 2018 or stabilizes at above Rs 70 per Dollar then we can witness another round of price hike just before Festive Season of October 2018.

Also the price hike to be all across the board and basis the localization component may vary with marginal hike to Maruti Suzuki, Mahindra, Tata with a substantial 2% hike to Luxury Brands Audi, BMW, Mercedes Benz which may be seen in

Sensors, ECU, Airbags are generally imported in from other countries by most of the car Manufacturers and with falling rupee the price as paid by Manufacturers to further increase the cost.

While Maruti, Hyundai, Mahindra, Tata Motors have achieved over 90% Localization the Luxury Brands are still hovering at 50% to 60% localization and thus the depreciating rupee going to deep impact in Luxury Brands in India

To act as double sword - the Interest rates have started firming up in India and thus likely to Increase further

 

Net Conclusion

If Planning to buy New Car during Year End or in Festive Season of 2018, it may just be worth to buy Car now as the double swammy of price hike and Interest rate hike will impact in higher outflow in September or Possibly October 2018

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Monday, 23 September 2019

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