Indian auto industry yet again affected, this time with the continuous weakening of the rupee

Automotive updates | Admin | November 30, 2011 at 9:39 am

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Indian auto industry yet again affected, this time with the continuous weakening of the rupee. This has forced the big players in the auto industry such as Toyoto Kirloskar Motor and General Motors India to hike the prices to counterbalance the inflated cost of imported auto components.

Speaking on the effects of rupee depreciation on the company, P. Balendran, Vice President, General Motors said “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 soon.”

He also stated that the commodity prices going off the limits are also adding more pressure on auto companies and specifying to his company he said that they are evaluating the impact of that on their product pricing.

The inconsistency in the currency market is also affecting companies like Toyota and speaking about the same, Sandeep Singh, Deputy Managing Director (Marketing) of Toyota Kirloskar Motor said “It is a double whammy for us. On one hand, yen is appreciating, while on the other hand rupee is depreciating. Our margins are getting impacted. 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.”

Rupee depreciation is a huge blow for companies that import large quantity of auto components from overseas and being a net importer has also affected companies such as Maruti Suzuki India. The auto companies were only trying to cope up with the fall in demand so far but now they also have to buck up to face the challenge posed by the recent rupee depreciation. Price hikes of their products is not something that the auto companies aim to do keeping their customers in mind, however, if the current situation persists, they may just be forced to.