Pressured Maruti hikes prices of diesel models by Rs10,000
15 November 2011
Maruti Suzuki has hiked the prices of its diesel models by up to Rs10,000 with immediate effect. The price of the Ritz hatchback has been raised by Rs2,000, while the diesel variants of Swift, Dzire and SX4 cars became costlier by Rs10,000.
"There has been a critical upswing in the inputs cost and an adverse appreciation in the Japanese currency yen that had made imports costlier and forced this hike," a company spokesperson said on Monday.
Maruti Suzuki, owned 54.6 per cent by Japan's Suzuki Motor Corp, continues to be billed as India's largest carmaker by sales, despite a massive loss of production and consequent slide in market share this year due to labour troubles at its Manesar plant in Haryana since June that kept the plant shut for 59 days. Production declined 55 per cent below normal in October to 50,487 units; and the waiting time for some of Maruti's diesel models like the popular Swift stretches up to nine months.
The company's profit margin during the quarter contracted 4.2 percentage points from a year ago to 6.3 per cent because of foreign exchange fluctuations that had an impact on its imports and royalty payments. The yen strengthened 20 per cent against the Indian currency in the three months to 30 September, Shinzo Nakanishi, managing director of Maruti Suzuki, said earlier this month.
The demand for diesel cars has been rising sharply and steadily over recent years and particularly over the last year or so as buyers seek to take advantage of the massive price difference between the retail prices of petrol and diesel.
While petrol prices were freed up in July last year, leading to unrelenting hikes, diesel continues to be heavily subsidised, so that the price difference today is as much as Rs30 a litre or about 68 per cent.