Japanese automaker, Honda has recently hinted plans to increase the price of its vehicle models in India. As per company officials, starting next month, prices of their vehicles will be increased to counter the impact of a substantial surge in the procurement cost of various raw materials such as steel and other metals.

Commenting on this, Rajesh Goel, Senior VP and Director, Honda Cars India, said that raw materials like aluminum, steel, and precious metals prices have increased significantly. Some of them are available at an all-time-high cost, severely impacting the company’s input costs. Mr. Goel added that the firm is presently exploring how much the price hike would be effective from August.

The goal is to maintain purchase costs as low as possible. Therefore, their firm is contemplating on how much-increased cost can it absorb and how much can be passed to consumers. The new prices will go into effect next month.

Reportedly, Honda has raised prices of its vehicles in April this year. The prices of steel have risen significantly in the country over the last few months. In June, the prices of HRC (Hot Rolled Coil) and CRC (Cold Rolled Coil) have been hiked by up to Rs 4,000 and Rs 4,900 per ton respectively, by a leading domestic steelmaker.

Flat steel products such as HRC and CRC are used in industries including automotive, appliances, and construction. As a result, every increase in steel pricing impacts automotive, consumer products, and construction expenses.

With rising input costs, MSI (Maruti Suzuki India) reported in June that it would raise its entire product portfolio in its September quarter. In April, MSI announced a 1.6 percent price increase in ex-showroom prices of its vehicle models. While in January, the manufacturer announced a price increase of up to Rs 34,000 on selected models.

Source Credit - https://www.newindianexpress.com/business/2021/jul/04/honda-plans-to-hike-vehicle-prices-from-august-as-input-costs-go-up-sharply-2325369.html