Budget 2012: Maruti, Honda, M&M to raise vehicle prices

With an increase in the excise duty on all products in the Budget for 2012-13, car makers like Maruti Suzuki, Mahindra & Mahindra and Honda Siel Cars India will hike prices of their vehicles by up to Rs 70,000.

"We are going to raise the prices of all our products and will pass on the entire additional excise duty. Currently we are working on the exact amount of the hike," Maruti Suzuki India Managing Executive Officer (Marketing and Sales) Mayank Pareek told PTI.

Homegrown auto major Mahindra & Mahindra also said it will increase the prices of its entire range of products. "Given the current economic scenario and the revenue deficit of the country, the hike in excise duty was fully anticipated. Although the industry will not cheer about this, but we have to live with it," Mahindra & Mahindra President (Automotive and Farm Equipment Sector) Pawan Goenka said.

The industry will pass on the entire burden of excise duty to customers, he added. "The input costs have also gone up in recent times. Considering this, we will raise the prices of our vehicles by 2-3%, translating into an increase of Rs 6,000 to Rs 30,000," Goenka said, adding the exact amount will be fixed in due course of time. The company will also increase the prices of its tractors by up to Rs 5,000 to Rs 6,000, he added.

"In the short-term, there will be an impact on the demand for the vehicles. However, if the interest rates favourably come down, we may see revival of demand in the auto industry in future," Goenka said. Honda Siel Cars India Senior Vice President (Sales and Marketing) Jnaneswar Sen said prices of all locally produced cars will be raised.