Automobile Price Hike In 2023 Likely To Be Moderate If Input Cost Remains Stable

The Indian auto sector has been struck by inflation for the last five years. On an average, models underwent an upward price revision between 7 per cent to 15 per cent every year and rise in input cost is one of the major reasons of the price hike. That said, the industry is expecting a comparatively moderate revision in prices in 2023 given the stable material cost and freight rate. According to the Society of Indian Automobile Manufacturers (SIAM), if the input cost and freight rate remain stable for a longer period, the price hike next year will likely be moderate.

Speaking to carandbike, Vinod Aggarwal, President - SIAM, "The cost of the vehicles will go up when it requires more fitment. The industry hadn't completely passed on the increase in actual cost to the customers and so further rise is expected. But since the raw material cost and freight rate have stabilised, it is likely to keep a check on the quantum of the increase." Though the industry has been observing a steady increase in demand post the COVID period, the entry-level segment remained under stress due to the perpetual increase in prices. SIAM has observed better growth in sales of B and upper segment models compared to entry-level cars and two-wheelers as demand in rural markets remained subdued.

SIAM also registered highest ever H1 and quarterly sales in quarter ending September 2022 selling 10,988,305 units in the April 2022 - September 2022 period as compared to 8,305,314 units sold in the corresponding period last year, recording a growth of 32.3 per cent. The industry recorded a growth of 38.42 per cent in the Q2 of FY 2023 selling 10,26,309 units as compared to 7,41,442 units sold in the same period last year.