Reasons behind recent price hikes in India's automation sector

If you’re looking to buy a new vehicle, then get ready to pay a higher price. Automakers have either already hiked prices or price increases are on the cards.

Tata Motors has hiked prices by 5% on commercial vehicles from April 1st. In a regulatory filing, Tata Motors said it is facing cost pressures due to overall inflation and regulatory requirements and that it had become imperative to pass on some of the impact. Hero Moto Corp has increased prices by 2%. Honda has already increased prices by Rs 30,000 across several models from January 1st

Meanwhile, M&M, MG, Kia are mulling raising their prices as well.

So, why are auto companies raising prices?

BS6 Stage II Norms will come into effect on 1st April. The transition includes tighter emission regulations, which raises the cost of production. Manufacturers need to upgrade both the software and hardware of the vehicles. Although it will help the environment, consumers should expect to spend an additional ₹15,000 to ₹20,000 depending on the model.

Supply Shortage: Supply chain issues are continuing into 2023. Mike Ramsey, VP Analyst at Gartner said that 'More than two years after the pandemic began, carmakers still cannot forecast an end to shortages of semiconductor chips or the subsequent shortage of vehicles they can produce.'
Specifically for electric vehicles, with demand rising, there is a shortage of EV battery raw materials as well

Six airbags mandate: Union Road Transport and Highways Minister Nitin Gadkari has mandated that all passenger vehicles have 6 airbags, for enhanced safety. This rule will be effective in October 2023.