<p>Amid the rising commodity costs that continues to squeeze its margins, <a href="https://www.mid-day.com/business/business-news/article/tata-motors-passenger-vehicles-sales-surge-56-per-cent-in-august-to-67753-units-23647796" target="_blank" rel="none noopener">auto firm Tata Motors Passenger Vehicles (TMPV)</a> on Friday said it is mulling further progressive and incremental price increases, according to news agency PTI.&nbsp;</p>
<p>The company said it is accelerating its cost reduction efforts, while absorbing a significant residual part of the rise in commodity costs.</p>
<p>"Still, there is a significant residual part of the commodity increase that we are absorbing, which has been hitting our markets, but at the same time we have been pacing our effort on the cost reduction side. We are reviewing every month in terms of when we'll have the opportunity to take a certain level of price increase," TMPV Managing Director Shailesh Chandra told PTI.</p>
<p>"But whenever we take the price increases, it will be in smaller escalations, so that it does not immediately impact the demand. So, it will be progressive, incremental price increases that we'll take over a period of time. We have taken one price increase in September itself, so the next price increase is too premature to tell you because we have to review when we can do the next price increase," he added.</p>
<p>Noting the uncertainty around commodity prices as a concern, he said the company&rsquo;s margins were under pressure as higher commodity costs could not be passed on to customers at the same pace, making cost reduction a key priority.</p>
<p>"It is not possible to pass on these increases to the market at the speed at which prices have been used on that side. So that remains a matter of concern, which creates immense margin pressure and immense effort from a cost reduction perspective," Chandra said.</p>
<h2>Auto firms have hiked prices</h2>
<p>Auto makers have been grappling with the higher input costs and passenger vehicle segment has witnessed multiple rate hikes this year.</p>
<p>Chandra pointed out that <a href="https://www.mid-day.com/business/business-news/article/tata-motors-to-hike-prices-of-commercial-vehicles-by-up-to-1-per-cent-from-october-1-23650489" target="_blank" rel="none noopener">price increases by manufacturers</a> since the implementation of GST have been below 5 per cent and not very aggressive.</p>
<p>"It could be a sub-5 per cent price increase so far by any manufacturer, from the time of GST. Even after GST, opportunistically OEMs (original equipment manufacturers) could have taken a price increase more aggressively, right? But rather, after GST there were more discounts also in the market. I think the first thing which has gone away is the discount because of the supply being more or less slightly behind the demand," he said.</p>
<h2>TMPV has announced rate hike twice in recent months</h2>
<p>Citing inflationary pressure, Tata Motors Passenger Vehicles has already announced two rate hikes in recent months.</p>
<p>TMPV had said it will hike prices of its vehicles across its models by up to Rs 25,000 from September 1, adding that the price increase across the portfolio, covering both internal combustion engine (ICE) and electric vehicles (EVs) will vary across models and variants</p>
<p>"This price revision is being undertaken to partially offset the impact of rising input costs and sustained inflationary pressures. While TMPV continues to absorb a significant portion of these increases, a part of the impact is being passed on to customers through this adjustment," it had said.</p>
<p>TMPV had earlier <a href="https://www.mid-day.com/business/business-news/article/tata-motors-announces-price-hike-of-up-to-1-5-per-cent-across-passenger-vehicles-23634856" target="_blank" rel="none noopener">increased the prices in July by up to 1.5 per cent</a>, citing the same reason.</p>
<h2>Hyundai Motors hiked rates</h2>
<p>Hyundai Motor India too had recently announced a price increase of up to 1 per cent across its portfolio, effective September citing combination of rising input and commodity costs, higher operational expenses and continuing geopolitical and macroeconomic uncertainties, among other factors.</p>
<p>"The company continues to make every endeavour to optimise costs and absorb cost escalations to minimise the impact on customers. However, the persistence of these cost pressures has necessitated passing on a part of the increased costs to customers through this marginal price revision," Hyundai Motor India had said.</p>
<h2>Maruti Suzuki increased prices</h2>
<p>Car maker Maruti Suzuki India earlier this month had announced another hike in prices of select models by up to Rs 20,000, its third hike since May and the company cited rising input costs and inflationary pressures behind the rate increase. Previously, it had <a href="https://www.mid-day.com/business/business-news/article/buying-a-maruti-car-to-become-expensive-from-august-company-hikes-prices-by-up-to-rs-30000-23640887" target="_blank" rel="none noopener">increased prices by up to Rs 30,000 with effect from August 1</a>, and with effect from June. The previous two price hikes announced by the market leader were across its portfolio.</p>
<p><em><strong>(With inputs from PTI)</strong></em></p>

The company has hiked its car rates twice in recent months, including an increase of by up to Rs 25,000 from September 1

Tata Motors Passenger Vehicles mulls further price hikes amid higher input costs

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Citing inflationary pressure, Tata Motors Passenger Vehicles has already announced two rate hikes in recent months, including an increase of by up to Rs 25,000 from September 1

Tata Motors Passenger Vehicles mulls further price hikes as commodity costs squeeze margins

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