Rising input costs add to automakers' woes

For Indian automakers, a surge in sales after the September tax cut has been eclipsed by a new concern: soaring raw material costs.

- Ayaan Kartik [e-mail]

Auto companies contemplate price increases.

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Many are contemplating price increases at the risk of suppressing demand.In their December quarter earnings calls, companies including the largest carmaker Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, and two-wheeler manufacturers TVS Motor Co., Bajaj Auto Ltd, and electric scooter maker Ather Energy Ltd have flagged rising prices of key inputs such as steel, aluminium and copper. Combined with a depreciating rupee, higher prices are weighing on their profitability.

“I don't think anybody knows what’s happening,” Tarun Mehta, co-founder and chief executive at Ather, told analysts on 2 February. “This is truly unprecedented in every way. There are a lot of commodities going haywire.”