In a strategic move, Maruti Suzuki, the country’s largest automaker, has announced a price increase across all its vehicle models, effective immediately. The news sent the company’s shares on an upward trajectory, gaining nearly 1.5% during Tuesday’s intraday session.
Navigating Cost Pressures: A Modest 0.45% Increase
The estimated weighted average increase in prices stands at approximately 0.45% across various models. This indicative figure is based on Ex Showroom prices of models in Delhi and will be applicable from January 16, 2024. The decision aligns with Maruti Suzuki’s earlier communication on November 27, 2023, where it signaled its intention to implement price hikes in January 2024 due to heightened cost pressures.
Market Response and Share Performance
Maruti Suzuki’s shares experienced a positive response to the announcement, gaining 2.6% over the past five trading sessions. Despite this recent uptick, the shares had witnessed a marginal dip of over 1% in the last month. However, looking at a broader perspective, Maruti Suzuki shares have recorded a notable gain of over 5.4% in the past six months.
Cost Management Efforts Amid Inflation and Commodity Price Rise
The automotive giant emphasized its commitment to cost management, stating that despite maximum efforts to reduce costs and offset the impact of inflation and rising commodity prices, there remains a necessity to pass on a portion of the increase to the market. The move reflects the industry’s ongoing challenges in the face of economic dynamics and cost fluctuations.
As Maruti Suzuki takes this step to balance its financial dynamics, industry analysts are closely watching the market dynamics and consumer response to gauge the potential implications on the overall automotive sector.
