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Cars are about to get pricier in India from January 2022 onwards as chip shortage plagues the automobile industry. Adding fuel to the car price hike is the rising inflation in the country.
To tackle the situation of ongoing chip shortage and inflation several automobile manufacturers are planning to hike the prices of their vehicles from the beginning of next year.
Due to pandemic related constraints, the overall production capacity of chip manufacturing industries have come down sharply and it has also affected the automobile industry as modern vehicles heavily depend on the chip industry for their complex electronic circuitry.
Amid this chip shortage crisis, several automobile manufacturers in India has increased the prices of their vehicles more than a couple of times this year alone.
Though the chip shortage situation has improved in recent times, automobile manufacturers still have to cover a lot of lost ground as several automobile manufacturers in India have a long waiting list to cover up.
This situation has again forced automobile manufacturers to hike the prices of their cars to meet their production demand. Some automobile manufacturers in India have waiting list going up as far as 6 months on some of their models.
The chip shortage has not even spared the luxury car market and Balbir Sigh Dhillon, Head of Audi India said "To offset rising input and operational costs, a price correction is necessary. The new price range of our select vehicles will ensure the brand's premium price positioning, thereby ensuring sustainable growth both for the brand and our dealer partners,"
Mercedes-Benz is also looking forward to hike the prices of its cars by 2 per cent from next year citing feature enhancement and rising input costs.
Maruti Suzuki has also announced a price hike on select models that will come into effect from January 2022 onwards. The statement from the Japanese car manufacturer said "Over the past year, the cost of company's vehicles continue to be adversely impacted due to increase in various input costs,"
"The increase shall vary for different models. On an average the material cost accounts for 70 per cent of our overall cost structure." the statement added.
Tata Motors is also likely to hike the prices of its cars and Shailesh Chandra, President of Passenger Vehicles Business, Tata Motors said, "Prices of commodities, raw material and other input costs continue to rise. An appropriate price hike to at least partially offset this increase in costs seems inevitable in the near to short term."
"There is a severe impact on input cost due to commodity prices' increase. We are still studying how much can be absorbed," said a Honda spokesperson, which potentially hints at a price hike in near the future.
Thoughts About Automobile Price Hike In India
The automobile industry around the globe has slowed down due to a massive chip shortage. Though the chip shortage crisis has affected the Indian automobile industry, the inflation in the country has further added fuel to the crisis.