January : Expect Price Raise

Car lovers and potential buyers celebrating the recent price cuts after the government slashed central value added tax 4% last week, may be in for a jolt.

Car makers said they are planning to raise prices 2 to 3 per cent in January, almost neutralizing the December cuts. The move is to improve margins and, in for cars with high import content, to cover the cost of a weakening rupee against the dollar.

Some analysts, however, suggest that car-makers threaten price rises every January in a bid to clear calendar year-end inventory.

Auto industry estimates price raise of at least 31 models -- from compact cars to premium sedans and sports utility vehicles from Maruti Suzuki, Toyota Kirloskar, Honda Siel Cars, General Motors India and Ford India -- will rise.

Chevrolet, the brand through which troubled US auto giant General Motors operates in India, said it will raise prices Rs 7,000 to Rs 57,000 across models. Honda Siel Cars India plans to raise prices of models like City, Civic, CR-V and Accord significantly. Up to 75 per cent of components for the Accord premium sedan and about 50 per cent for other models are imported.

The weaker rupee is also likely to see prices of Toyota models like the Corolla Altis, Innova, Camry and Prado go up between Rs 20,000 and Rs 30,000. Most car makers say their decisions are driven by the weaker rupee.

Lets see what the next year holds for the common man!