India’s largest commercial vehicles manufacturer, Tata Motors, plans to increase the prices of its commercial vehicles’ from October 1, 2021, owing to increasing input costs. With the semiconductor shortage looming over all electronic industries, commodity costs have been inevitably increasing.
“The effective price hike, in the range of 2%, will be implemented based on the model and the variant of the vehicle,” the company said in an exchange filing. “The continued rise in the cost of commodities, such as steel and precious metals, necessitates the company to pass on a part of it through an increase in price of the products,” it said.
The company is further striving to minimise the increase in the price by absorbing a certain portion of the cost at various levels of manufacturing. Tata Motors continues its efforts to deliver the lowest total cost of ownership for its customers and fleet owners, the release stated.
Tata Motors said its domestic wholesales increased by 53 percent to 54,190 units in August compared to the year-ago period. The company had sold 35,420 units in August 2020. The auto major said its passenger vehicle sales in the domestic market stood at 28,018 units in August, up 51 percent as compared to 18,583 units in August 2020.
Commercial vehicle sales in the domestic market stood at 29,781 units, up 66 percent from 17,889 units in August 2020.
Tata Motors shares were trading lower after the company announced price hikes. Tata Motors stock was down 1 percent at Rs 296, underperforming the Sensex which was down 0.2 percent.
Tata Motors shares have so far this year jumped 109 percent, massively outperforming the Nifty which has gained 25 percent.
India’s largest carmaker Maruti Suzuki, too, recently hiked the prices of its vehicles.