Why Should You Buy Your Cars In December; Price Hikes Might Not be the Best Call In Jan, Says Expert The current stock levels for most of the manufacturers at dealership points are very high, and the reason why price hike at this time isn't the best idea

Carmakers are set to increase prices from January 2025 due to the persistent rise in commodity prices, unfavorable exchange rates and increased input costs. However, the current stock levels for most of the manufacturers at dealership points are very high, and the reason why price hike at this time isn't the best idea. "Well, raising prices in January is something which is a regular phenomenon. There is a very strong case for manufacturers to increase prices because of inflationary requirements. Currently, there are high discounts going around and soaring stock levels for most of the manufacturers at dealership points. Given this, the price hike may not really make sense," said C S Vigneshwar, president, Federation of Automobile Dealers Associations (FADA).

"The manufacturers first have to concentrate on liquidating the stock at hand, making sure that they are able to bring down stock levels at dealerships. This would naturally make discounts come down and once the discount is done, then prices can be raised," Vigneshwar explained.

Kia India, a leading premium carmaker, has announced up to 2 per cent price hike across its entire lineup.The price hike, effective from January 1, 2025, is primarily due to rising commodity prices and escalating supply chain-related costs.

Commenting on the price adjustment, Hardeep Singh Brar, senior vice president, – sales and marketing, Kia India said, "Due to the persistent rise in commodity prices and escalating supply chain related costs, a necessary price adjustment has become unavoidable. Despite these challenges, Kia is absorbing a significant portion of the cost increase, minimizing the financial impact on our customers." Kia has sold 1.6 million units in India and overseas markets combined to date.

Similarly, Tata Motors, India's leading vehicle manufacturer announced a price increase of up to 3 per cent across its passenger vehicles portfolio, including EVs. Effective January 2025, the price increase will vary depending on model and variant, and is being taken to partially offset the rise in input costs and inflation.

Mahindra & Mahindra too announced a price increase for its SUV and CV range, effective January 2025. "Mahindra has made efforts to absorb as much of these additional costs as possible. However, a portion of this increase will need to be passed on to customers. The extent of the price increase across different SUVs and commercial vehicles will be upto 3 per cent," said the company in a statement.

Maruti Suzuki, in an exchange filing on Friday, announced its plans to increase car prices by up to 4 per cent from January 2025, with variations depending on the model. The company explained, "While the company continuously strives to optimise costs and minimise the impact on its customers, some portion of the increased cost may need to be passed on to the market."

Hyundai Motor India and Audi India have made similar announcements.

Traditionally, these price increases in January have always helped December sales because customers would want to buy the vehicles preponing their purchases. "Customers would always want good deals and also would like to avoid price hikes. So traditionally, this has led to great sales in December. Therefore, with the manufacturers who are planning to go ahead with the price increase, this would definitely make sure that the December sales are good and to an extent we can also liquidate stock. That's certainly something which has been happening in the past and we hope that all the stocks can be liquidated. However, looking at the stock position, the duration would be close to 65 days, so I doubt the liquidation will happen soon," Vigneshwar added.

The price hikes coupled with the current ongoing offers, would surely make December a strong month for sales, across domains.