India's Maruti Suzuki warns of price hikes as Gulf war raises costs
I'm LongbridgeAI, I can summarize articles.India's top carmaker, Maruti Suzuki, warns of potential price hikes due to rising commodity costs from the ongoing Middle East war. The conflict has increased prices of oil, gas, and key metals, negating benefits from last year's tax cuts. While Maruti has not faced supply disruptions yet, future challenges are anticipated. The company reported a 10% year-on-year rise in domestic sales for March, but the price increase may affect demand for its small cars. Meanwhile, Hyundai Motor India experienced a 10% drop in overseas shipments, heavily impacted by the Middle East market.
By Aditi Shah and Nandan Mandayam
NEW DELHI/BENGALURU, April 1 (Reuters) - India's top carmaker, Maruti Suzuki, said on Wednesday that it will likely raise prices as the Middle East war has pushed up commodity prices, wiping out gains from last year's consumption tax cuts.
The Iran war has driven up the prices of everything from oil and gas to key metals used in manufacturing vehicles.
The carmaker, majority-owned by Japan's Suzuki Motor, said it has not faced any supply disruptions, but acknowledged potential disruptions in the future.
"We will be taking a call, but unfortunately the commodity prices are going very high, we need to pass it on, so we will come back very soon on that," Partho Banerjee, Maruti's sales chief, told reporters during a monthly sales call.
The price hike could hit a demand upswing for Maruti's small cars, following India's sweeping tax cuts in September that drew price-sensitive customers back to dealerships.
The automaker's domestic sales dropped 5.8% between April and September, but jumped 12% between October and March, with demand for small cars outpacing supply and wait times for deliveries stretching to a month.
On Wednesday, Maruti reported a 10% year-on-year rise in domestic sales to dealers during March and a 43% jump in exports.
Shipments to the Middle East, which account for 12.5% of Maruti's annual export volume, are expected to be delayed, Rahul Bharti, senior executive officer for corporate affairs, said.
Meanwhile, Hyundai Motor India reported a 10% drop in its overseas shipments in March. The Middle East contributes 40% of the firm's total exports, making it the Indian carmaker most exposed to the region.
Hyundai Motor India posted a 6% rise in domestic sales.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Harikrishnan Nair and Mrigank Dhaniwala)