Mumbai, June 26: Car makers are gearing up to hike prices of leading models by 5-10 per cent despite a sharp spurt in car sales since April this year, spurred by tax cuts in the March budget. Leaders like Maruti, Hyundai, Toyota are expected to announce new prices soon, while Fiat recently raised the price of Palio diesel. Toyota Kirloskar Motor said on Wednesday that it is contemplating a price increase of its multi-purpose vehicle Qualis and the recently launched mid-size offering Corolla. It attributed the decision purely to rising steel prices.

Car sales have been on a roll so far this year, rising by 35% in April-May, helped by price cuts effected after the Budget in February. Analysts say the proposed hike, when implemented, could drag down the sales growth. Says Satoshi Aoki, director, marketing, Toyota Kirloskar Motor, “Steel prices have risen by 15-20%. Though the quantum of the hike is yet to be finalised, the revision would be Rs 10,000 to Rs 18,000 across all versions.”
“We have been trying to hold back the hike for some time. But if the steel prices continue to rise, we will have to increase prices soon,” Mr Aoki added. Korean major Hyundai increased the prices of Santro in the first week of May and blamed it on rising input costs. Hyundai recently launched the Xing, but kept the prices unchanged. Bureau Report