MG Motor to increase vehicle prices by 2-3%

MG India said it will follow other companies in raising the prices of its vehicles in all segments by 2-3% in the coming month due to rising costs of inputs such as semi-chips. drivers and logistics.

The company had already increased the prices of its Hector and Hector Plus SUVs three times this calendar year (January, February and April) due to rising input costs.

“You name anything like aluminum and copper, the price goes up, the price of crude goes up, the prices of steel are up and I think it’s getting really hard to manage the bottom line and ‘balance what you take in and transfer. And, we’re like yet another new business, so we’re making a loss. For us it becomes a big challenge, so we have to take it up, ”said Rajeev Chaba, President and CEO of MG Motor India. Activity area during a telephone interview.

Impact on industry

He said there are three things impacting the industry – one is the chip shortage, the second is shipping / logistics costs going out of control globally and the third is rising cost of components. Chaba said that although the market is opening up, supply chain issues persist.

Having said that, he added, “I think things are improving a lot. June has been a lot better than May and I think July will be even better than June, hopefully. We are still grappling with the constraints of the supply chain, but hopefully in the next two or three months we should improve. “

Chaba added that there are still markets in the northeast and the south that have yet to open. But the company’s plant is running almost 100 percent right now and is ramping up quickly, with the workforce also returning to full capacity, Chaba added.

Cost implications

Besides MG Motor, other companies such as Maruti Suzuki India (MSIL), Honda Cars India and others are expected to increase the prices of their products in the current quarter.

“Over the past year, the cost of the company’s vehicles continues to be negatively affected due to the increased costs of various inputs. Therefore, it has become imperative for the company to pass on some of the impacts of the above additional costs to customers through increased prices. The price increase is expected in the second quarter (July-September period), ”MSIL said in a statement on June 21.

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