MUMBAI, Dec. 3 (Xinhua) -- Maruti Suzuki India will raise prices of its vehicles across various models in January to overcome the adverse impact of input costs, said the company statement to the Bombay Stock Exchange, Tuesday.
It has become imperative for the company to pass on some impact of the additional cost to customers through a price increase across various models in January 2020, the statement said.
Indian automobile sector has been going through low demand during the current fiscal year with slight revival seen during the festive season in October.
This could be gauged from the fact that the operating profit margin for Maruti Suzuki dropped to 9 percent in the recent July-September quarter from 17 percent in the same quarter two years ago, said an auto analyst with a domestic brokerage.
Slowdown in demand and increased competitive intensity had forced Indian auto companies to offer discounts, leading to higher promotional expenditure coupled with weaker operating leverage that kept the margins under pressure, the analyst said.
In September, following the corporate tax cut announced by the Indian government, the Indo-Japanese car manufacturer had reduced prices of select model by Rs 5,000 (some 70 U.S. dollars) on ex-showroom prices.
Earlier this month, India's leading passenger vehicle maker achieved a key milestone of 20 million passenger vehicle sales in the Indian market after having sold its first car in December 1983. It had achieved the 10 million vehicle sales in about 29 years, the next 10 million were sold in eight years.
