This follows price hikes of up to Rs 3,000 that the company effected from 1 July and up to Rs 2,000 effective 5 April. This is the fifth price hike the New Delhi-based has taken in the past one year.
The price hike comes at the beginning of the Diwali festive period, which is a crucial sales window for Indian automakers. Hero MotoCorp had taken a similar price bump from 20 September 2021.
A hike by the market leader could trigger an industry-wide spate of price increases, experts said.
Automakers in India have seen their margins erode since the past one year on account of increasing input costs. Prices of steel, a key input, have been on the rise for the past couple of years and increased to an all-time high in April before gradually softening.
Hero said in a statement that this hike will only partially offset the impact of cost inflation.
“Because of a sharp increase in input costs, margins of automakers have been a bit under pressure,” Arun Agarwal, vice president at Kotak Securities, said speaking about the automotive industry at large. “We have seen some correction in commodity prices in recent months and there could be some improvement in margins from the second half of this financial year.”
The price hikes by automakers that began with the implementation of the BS-VI emission norms from April 2020 have resulted in vehicles getting dearer by upwards of 20%.
The quantum of price increase has been particularly hard for entry-level vehicles, the segment where Hero MotoCorp and passenger car market leader Maruti Suzuki primarily operate. Prices of entry-level motorcycles have gone up by over 25% in three years, pushing a significant number of the consumers out of the market.
Hero MotoCorp’s sales fell by 38% from 7.8 million units in FY19 to 4.8 million units in FY22.