Cars, ACs set to be dearer
From April prices of most cars, automobiles & white good will decreased. Cars, ACs are set to be dearer. The steep increase in prices of steel, aluminum & copper will be passed on to the consumer, who will now have to sheel outmore money to buy these goods. Though the excise duty cut announced in the Budget proposals had led to the prices of these goods being marginally cut, this benefit has come to a naught because of hike in input costs.
Since december 2007, prices of alloy steel have gone up by 8 to 12% to RS 42,500 per ton, white aluminum prices has shot up by 18% to RS 1,13,680 per ton & copper by 31% to reach RS 3,55,600 per ton, The tribune newspaper reported. Automobile mobile sector & consumer durables companies now say they will not be able to absorb the increase in key input costs for long & will have to increase the prices. An official of Hyundai Motors said though they were absorbing the hike in input costs, it would eventually affect the price of their cars.
The official said, “Since most automobile companies make long-term annual purchase orders for sheet metal, manufacturers have been so far been able to withstand the cut in their operating profits”.
However, with fresh contracts for purchasing steel & aluminum coming up in the automative sector, the industry is now beginning to feel the heat. A senior official of Piaggio Vechiles said that the effect of the excise duty cut has been diluted with the sharp increase in prices of metals. The official said, “If the prices of steel, aluminum & copper continue to rise, as is being predicted, we will have to rise the prices”.
Cheif General Manager of Maruti Suzuki, R S Kalsi said, though they have not yet taken a call on the price hike, but considering the high input costs, it is a probability. He said, “though the rising input costsare hurting us, we have yet to see how much the company can withstand by raising production efficiency”.
Even the consumer durables industry is now thinking of increasing the price, beginning next month. Whirlpool’s vice president Tamal Kanti Saha said that a 4% hike in prices of air-conditioners, refrigerators & washing machines would be affected in April.
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