Barring Creta Hyundai India to hike car prices by up to Rs30,000

Hyundai motor India Ltd, the country's second-largest carmaker and largest car exporter, today announced an across-the-board increase in car prices, except for the recently-launched SUV Creta.

The price hike will be within a ceiling of Rs30,000, Hyundai said, but did not specify planned hikes in the prices of individual models. The company attributed the price hike to rising cost of raw materials.

It is likely that the maximum price hike would be for its top-end SUV Santa Fe. Its bestselling models like Grand i10, Elite i20, Eon and Xcent would, however, attract much lower hikes.

The price increases would be effective 1 August 2015, the company said in a statement.

"The price increase has been necessitated by increase of input costs. We have been absorbing most of the costs, but now we are constrained to consider the price increase in these challenging market environment," Rakesh Srivastava, senior vice president, sales and marketing, HMIL, said.

Other carmakers are also expected to hike prices, following Hyundai's price hike. Earlier this month, General Motors had announced a 1 to 2 per cent increase across all its models following a rise in dollar value. The last time companies had increased prices was in January.

Market, analysts do not see any justification for a price hike at this time of the year and, according to them, it could either absorb investments in new products or create more head room for discounts in the upcoming festive season.

According to industry body Society of Indian Automobile Manufacturers (SIAM), prices of steel and aluminium have actually declined by 8-10 per cent and 5 per cent, respectively, between December 2014 and May 2015.

Only rubber and polypropylene (thermoplastic) prices have firmed up by 4.4 per cent and 8.4 per cent, respectively, during the period.

In fact, with car sales slowing after an initial jump, prices should actually have been reduced to push sales, they say.