Maruti Suzuki’s shares gained as much as 2 per cent after the carmaker announced to hike the prices of cars by up to 4 per cent to offset rising input costs and operational expenses
Shares of Maruti Suzuki India gained as much as 2 per cent in early trade on Monday, March 17 after the carmaker announced to hike car prices by up to 4 per cent. The price increase will vary depending on the model, the company said. The automotive stock touched an intraday high of Rs 11,755.65 apiece on the BSE.
In an exchange filing, Maruti said, “In light of rising input costs and operational expenses, the company has planned to increase the prices of its cars from April, 2025. The price increase is expected to be up to 4 per cent and will vary depending on the model.”
Maruti Suzuki is India’s largest carmaker with about 41 per cent share in the domestic passenger vehicle market.
“While the company continuously strives to optimize costs and minimize the impact on its customers, some portion of the increased cost may need to be passed on to the market,” the country’s largest carmaker added.
In the automotive industry, input costs refer to all the expenses involved in manufacturing a vehicle, including raw materials like steel, aluminium, and plastics, as well as labour, utilities, and overheads. These costs directly affect production expenses and, ultimately, the price of the vehicle.
According to the company's latest investor presentation, while sales volume in the third quarter of the current financial year (Q3 FY25) grew by 13 per cent year-on-year (YoY) to 5,66,213 units, and accordingly net sales jumped 15.5 per cent YoY to Rs 36,802 crore, material costs as a percentage of net sales rose by 70 basis points to 74.7 per cent, compared to 74 per cent in the previous year’s corresponding quarter.
Though employee costs remained the same, other expenses declined by 50 bps YoY to 13.6 per cent of net sales in Q3. As a result, the carmaker's profit after tax (PAT) as a percentage of net sales dropped by 20 bps YoY to 9.6 per cent.
This rise in costs was mainly driven by higher expenses related to sales promotions and advertising expenses.
Maruti’s decision to hike their car’s prices is part of a broader trend within the Indian automotive industry, where manufacturers are responding to rising production costs by raising prices. In December 2024, major automakers including Maruti Suzuki, Hyundai Motor India, Mahindra & Mahindra (M&M), and JSW MG Motor all announced price hikes to mitigate the impact of increasing input costs.
Maruti Suzuki’s upcoming price increase in April follows a previous hike of up to 4 per cent implemented in January 2025, which was announced in December last year. Similarly, M&M and JSW MG Motor raised prices by up to 3 per cent from January 2025, while Hyundai also adjusted its prices, with hikes of up to Rs 25,000 on certain models.