BENGALURU (Reuters) – Maruti Suzuki India, the country’s top car maker, on Tuesday hiked prices of its models by 0.45%, far lower than its hike in January last year, signalling a slowdown in the demand for its cars.
Maruti and its peers had said towards the end of 2023 that they planned to hike prices from January due to increased commodity costs.
The company, majority owned by Japan’s Suzuki Motor has struggled with sluggish sales in the small car segment, as the income levels of its traditional customers failed to keep pace with the escalating prices of goods ranging from cars to consumer products.
Analysts expect passenger vehicle sales to grow around mid-single digits this fiscal and slow down further in the next, following a surge in sales in the last fiscal driven by pent-up demand due to COVID.
The maker of Swift hatchback had increased prices averaging 1.1% across its entire car lineup in January last year, more than double the latest hike.
Automakers in India increase prices of their vehicles in January every year after attempting to woo customers with seasonal discounts.
Considering the year-end, coupled with low demand for entry-level vehicles, Maruti increased discounts on its lesser-priced models by 40-45% in December 2023.
Still, the sales of its small cars like the Alto and Celerio were down 29% in December, compared to the previous year, partly due to Maruti’s moderation of wholesales.
Maruti’s overall sales from April-December grew 8.5%, slower than last fiscal year’s 26% rise.
(Reporting by Varun Vyas and Nandan Mandayam in Bengaluru)