Thu, 08 Dec 2022 12:51 PM IST
India, the world's largest democracy, has a high rate of car ownership. Due to the fact that people travel across the nation for work, most Indian cities have high car densities. Mumbai and Delhi are two well-known Indian cities where car purchases are common. India's drivers adore its cars for their convenient commutes and luxurious features.
However, the automotive industry has recently experienced a decline in sales in the fifth-largest market globally. The 'price hikes' theory is one of many that have been put forth online as to why the nation has experienced such a decline.
Why, then, are automakers raising prices across the board? We believe the following indicators may be the cause:
1. Supply Chain Disruptions:
Since the entire world has been experiencing a global supply chain disruption for some time now, businesses are being forced to raise their prices in order to compete in the market. In connection with this, inflation also comes into play. The availability of microchipsets, engine parts, and various government-introduced norms has caused manufacturing to reach extremely high prices.
2. BS VI Phase 2 Norms:
Due to the implementation of BS VI Phase 2 Norms, all businesses intend to increase their prices at the beginning of the following year. The Euro VI norms are thought to be equivalent to the BS VI Phase 2 norms. Companies previously invested roughly Rs 70,000 crore to transition to the BS VI norms in 2020, which may be the cause of the automotive industry's ongoing price increases.
3. Added Features:
Over the time, technology has seen a rapid growth in the industry. The customers are considering features as their first priority and this is the reason why the companies are introducing more expensive features in their cars which indirectly leads to the price hike.
Another aspect could be the improved fuel injectors to control the amount of carbon released by the car.
4. Six Airbags As Standard?
Another potential explanation for such price increases is the new regulation that requires six air bags to be standard. Earlier, entry-level trims were only offered with two airbags as standard, while top-end models have six airbags.