The company has been facing higher input costs for nearly a year, and the impact is now significant enough to warrant a price revision.Tata Motors Passenger Vehicles Ltd (TMPVL) plans to increase vehicle prices in the coming weeks due to continued pressure from rising commodity costs, its Managing Director and CEO Shailesh Chandra said. The company has been facing higher input costs for nearly a year, and the impact is now significant enough to warrant a price revision.
Speaking during a quarterly earnings call, Chandra said the rise in commodity prices, especially precious metals and copper, has added pressure on the company’s cost structure. “Yes, we have been facing pressure on the commodity side for nearly a year now. Still we see pressure on the precious metal side, copper and so on. Overall, if you see the impact of commodity price increase, it has been for us about 2 per cent plus of our revenues,” he said. He was responding to a question on whether Tata Motors plans to raise vehicle prices due to higher costs.
Chandra confirmed that the company will move ahead with the price hike but did not share details on the extent of the increase. “We will be able to announce this in the coming weeks,” he said.
Other major carmakers are also dealing with similar cost pressures. Market leader Maruti Suzuki India said last week that it is reviewing the need for a price hike due to rising commodity costs. Senior Executive Officer, Marketing and Sales, Partho Banerjee said the increase in prices of precious metals has been “phenomenal”.
Banerjee said the company is trying to absorb part of the cost increase but added, “After a certain extent, if we are unable to somehow accommodate the cost increase, we need to pass it on to our customers.”
Hyundai Motor India has already raised prices in January, mainly for its Venue model. The company’s Head of Investor Relations, Hariharan KS, said commodity volatility remains a concern. “Going forward again, we will be continuously monitoring this commodity trend, because we are in times of huge volatility in all these precious metals and commodities,” he said.
