Rising prices of key commodities like steel and rubber have led to two-wheeler companies going for price mark-ups. Both TVS Motor and Bajaj Auto have opted for price hikes in the past couple of weeks and market leader Hero Honda is in a wait-and-watch mode. Further hikes are ruled out in the April-June quarter.
The Chennai-based TVS Motor Company went in for a 1.5-2% price hike in the first week of April. The hike covered its entire range including three-wheelers. “This was on account of steel and rubber price hikes and the increase in overhead costs for suppliers. We have passed on a miniscule part of the cost increase so we will definitely look at the price line again once we come to know the full extent of the impact by the end of May. We will take a call on further price revision in June,” H S Goindi, president, TVS Motor, said.
Bajaj Auto also increased prices of its products in the first week of April and marked up export prices beginning May. As for TVS, the commodity price pressure in March has been the trigger. However, there’s no talk of further price hikes immediately.
In Hero Honda’s case, the price line remains unchanged for now but the company is in a monitoring mode. “We are monitoring the commodity situation closely and keeping all our options open,” said Anil Dua, senior vice-president (marketing and sales), Hero Honda. Hero Honda took a price increase in March and is therefore holding prices now.
So far though two-wheeler and three-wheeler demand has been holding up. Hero Honda totted up more than 39% growth in sales volumes in April at a staggering 5,17,099 units. TVS was up 14% at 1,67,744 units of overall sales, while Bajaj was up 17% to 3,67, 309 units. However, “If inflation and other factors continue to press on, demand may be impacted,” Goindi said.
Author – BikeAdvice.in