Mahindra & Mahindra share price falls over 3% after auto major announces price hike; check details

The price increase is attributed to rising input costs and increased commodity prices, among other reasons, the Mumbai-based auto major said in a statement.

The extent of the price increase will vary across different SUVs and commercial vehicles, it added.

Various automakers, including Maruti Suzuki India, Hyundai Motor, Tata Motors, Kia India, BMW and Honda Cars India, have announced they will hike vehicle prices from next month, citing rising input costs.

Maruti Suzuki India, which leads the domestic passenger car segment in the country, plans to hike prices of its entire model range by up to 4 per cent from next month.

The auto giant currently sells various models, ranging from the entry-level Alto K-10 to the multipurpose vehicle Invicto in the domestic market, with prices ranging from ₹4.23 lakh to ₹29.22 lakh, respectively (ex-showroom Delhi).

Its rival Hyundai Motor India said it will increase car prices by up to 3% from April 2025, owing to rising raw material and operational costs.

Similarly, Tata Motors intends to increase the prices of its passenger vehicle range, including electric vehicles, from April 2025, for the second time this year.

Deloitte Partner & Automotive Sector Leader Rajat Mahajan said carmakers usually have two price hike cycles in India, one at the beginning of the calendar year and another at the start of the financial year.

"The reason for the extent of the hike varies; it could be related to currency fluctuations, where we need more rupees to import the same product, commodity or component," he stated.

Over the last six months, the US dollar has appreciated by almost 3% against the rupee, which affects high import-dependent categories that may have a direct or indirect impact on input costs.

Besides, original equipment manufacturers (OEMs) with a complete knockdown (CKD) footprint are likely to experience an even greater effect.

"Other reasons seem to be tepid demand for entry-level vehicles, especially from first-time buyers and rural customers, which is putting pressure on margins. Price elasticity is relatively low in premium segments, and any upward change will boost margins," Mahajan stated.

Also, the number of features getting added in the cars is also a reason for such regular hikes that are seen over the last few quarters, Mahajan added.

"At the same time, OEMs are aware of high price sensitivity in the entry-level segments. Hence, they are likely to be cautious in executing these hikes, given the segment may see a revival, especially after the recent budget, which left more money in the hands of the consumer," he noted.

Icra Corporate Ratings Vice President and Sector Head Rohan Kanwar Gupta said the price hikes are generally taken at the start of the calendar/fiscal year to help offset factors like increases in operational costs on account of inflationary pressures and commodity prices, among others.

"The recent price hikes announced by various car makers are for the same reason," Gupta added.

Auto sector: Recent news

According to news reports, the Society of Indian Automobile Manufacturers (SIAM), the auto industry body, recently said that it expects 1-2% growth in passenger vehicle (PV) sales in FY26. Earlier, the expectation was 3-4%. SIAM, as per the report, trimmed its sales projections for PVs, citing weak demand, affordability concerns, declining entry-level car sales, and a fading post-pandemic surge.

Some of the passenger vehicle companies in India include Tata Motors, Maruti Suzuki India, Mahindra & Mahindra (M&M), Hyundai Motor India, Bajaj Auto, Force Motors, Hero Moto Corp, among others.

Besides, global broking firm Nomura has also reiterated the same.

SIAM stated that the rising costs due to currency depreciation could make vehicles more expensive for consumers, reports added.