Hit by the depreciating rupee, auto companies, including General Motors India and Toyota Kirloskar Motor, are mulling a hike in prices to offset the rising cost of component imports.

Mr P Balendran vice president of General Motors India said that "We import lots of parts and the rupee depreciation is impacting us. We were planning to review prices in January but due to the currency fluctuation we may have to do it sooner.”

He said commodity prices have also been increasing, adding to the burden on auto firms.

Mr Balendran said that "We are currently evaluating the quantum of impact on the prices of our products.”

Expressing similar views, Mr Sandeep Singh deputy managing director (marketing) of Toyota Kirloskar Motor said the present currency fluctuation is affecting the company severely. He added that "It is a double whammy for us. On one hand, the yen is appreciating, on the other, the rupee is depreciating. Our margins are getting impacted.”

Asked if the company would increase prices, Mr Singh said that "As of now we are absorbing, but if there is too much pressure, then we will share the burden with customers. Currently, we are revisiting the prices of all our models. Any new price increase, if we take, will be applicable from January 1."

The rupee plunged to an all-time low this morning to INR 52.50 against the US dollar on the Interbank Foreign Exchange on sustained demand for the American currency. It is putting severe pressure on companies which import substantial amount of components from overseas.

Mr Ajay Seth CFO of Maruti Suzuki India said that "The rupee depreciation is adversely impacting us as we are a net importer. This is the worst movement of rupee against the US dollar. It has lost 15% in the last two months.”

The hit due to the weakening of rupee comes at a time when auto makers have been enduring one of the toughest periods with car sales in the country on a continuous decline.

(Sourced from BS)