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Carmakers Hold Back From Increasing Price In View Of Weak Demand
Near the end of March, rumours arose that several automakers were planning to hike prices of their products due to increasing production cost starting from April. That never came to be though. The reason for this is believed to be poor demand for four-wheelers.
While it is known that almost every automaker was contemplating revising the cost of their cars to improve profit margins, only Honda Cars India and Mahindra & Mahindra actually went ahead with it, while Audi's new prices will come into effect from May.
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Meanwhile, Maruti Suzuki, Hyundai, Tata Motors, Toyota Kirloskar, Ford Motors, General Motors among others seem to have come to the conclusion that they are ready to settle with lower profit margin rather than risk further discouraging potential buyers from making a purchase.
The last increase in price was in January, but prices were dropped again in March after tax concessions. Unfortunately, this failed to improve car sales, which fell by 7 percent in March.
Until demand for automobiles increases by a significant amount or if manufacturers are no longer able to deal with increasing operational costs, existing prices are expected to be frozen.
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