Mahindra & Mahindra Raises Prices By 2%

Auto major Mahindra & Mahindra has decided to increase the prices of its products. The hike in the prices of the overall products will be in the range of 2%.

The product portfolio of the company consists of various models which would be costlier by Rs 6000 to Rs 20000, depending on the models. This increase in price would come into effect from October 1, 2013.

Depreciating rupee and high material costs has increased the input cost of the product. Therefore, to secure their profit margins, the company has taken such step.

However, if we look at the sales volume for the last couple of months we find that the company has witnessed decline in sales figures. The monthly sales volumes have gone down by 7% in June, 19% in July and 18% in August as compared to previous year.

Earlier, this month we have seen such announcement of increase in the prices from all of the major companies in auto sector. Maruti increased their product prices upto Rs 10000 for its various models while Tata Motors have raised the price upto Rs 20000 for its vehicles. Among non-listed companies, Hyundai, Ford and Toyota, have already announced for the price hike in the range of Rs 5000 to Rs 24000 on their products in India.

Investors are naturally distressed, and the stock price of the company has gone down by 2% to Rs 826.90 in today’s session till now. In the present economic scenario is not feasible to increase prices while auto companies are targeting festive season to improve their sales as well as revenues. A similar trend was observed when Maruti Suzuki and Tata Motors had announced a price hike.