The weak rupee is showing its ugly face. Honda is likely to hike car prices across most models by Rs. 10,000 to Rs. 1.5 lakh starting January 2008. The price hike has been attributed to the depreciation of the rupee. Since most auto parts are imported, the rupee's depreciation has made them expensive, forcing Honda to go for a price hike despite a slowdown in the market.
The highest impact would be on the sports-utility vehicle CR-V, which is imported to India as a completely-built unit. The price of the CR-V is expected go up by at least a lakh. While price of the luxury sedan Accord will go up by Rs 30,000-50,000, Civic will likely to be dearer by Rs 10,000-20,000.
As of now Honda has no plans to increase the price of the City. Its new model has just been launched and Honda will deliver them at the announced price. Currently, there are as many as 5000 bookings.
Honda's price hike comes at a time when the car industry in India is in the grip of a slowdown due to record-high interest rates and tight retail financing by banks. Sales of Honda fell by almost 28% for the months April-October compared to the same period last year.
The slowdown has also forced the company to go slow on its upcoming second plant in Rajasthan where it has decided to delay production of cars from the earlier-scheduled 2009 to 2010.
Source: Infibeam.com News
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