Costly proposition

New Delhi, Jan. 5: Car majors Honda Siel Cars India (HSCI) and Hyundai Motors India today announced a price increase to meet higher input costs. The new prices will be effective from tomorrow.

The prices of Honda’s City models were raised in the range of Rs 5,241 to Rs 8,481 and the Civic by Rs 12,801.

The company said the increase has been in the range of 1 per cent to 1.2 per cent.

In a statement, the company said that price increase on its models would range from 1-1.2 per cent.

Increase in the price of Honda Accord will however be announced after the launch of its new version on January 9. This is the first price increase by Honda Siel in two years, the company said. After the increase, Civic will be available in the range of Rs 10.88- 11.58 lakh (ex-showroom, Delhi) and City, Rs 6.75-7.98 lakh.

Honda said the cost of raw materials — steel, aluminium, plastics — as well as of logistics have increased in the last two years.

“The reasons are obvious — input costs have been rising steadily for the past two years, but we have not passed them on to the customers. At Honda, we don’t like to disturb the prices of products after launch and have absorbed the costs so far. But now we have to pass on some of the cost increase to the customer”, said Jnaneshwar Sen, general manager-marketing, Honda Siel Cars.

Hyundai also announced an increase in the introductory price of its latest mid-size offering Verna. The rise is Rs 3,500 for the base petrol model and Rs 10,000 for diesel.

Companies such as Maruti, General Motors, Skoda and Toyota Kirloskar have said they will raise prices this month. Hyundai, the second largest car manufacturer in India, sold 2,99,513 cars in 2006, an increase of 18.5 percent from the previous year.

Sales in the domestic market rose 19.1 percent to 186,174 units in 2006, while exports increased 17.4 percent to 113,339 units.