Re: Maruti hikes diesel car prices by up to 10,000 rupees Quote:
Originally Posted by .sushilkumar Well If the RAW material cost has really increased , i will try to absorb it with in. if i am selling a car for 7 + lakhs, i am sure that my margin is enough to absorb that small rise in cost . I might also pass on this increase a bit to business associates and distribute it across the board and even if than also i am forced to increase cost, i will make sure that cost is spread across all the affected models rather than trying to pass the cost to one particular type of model which is moving fast . here also petrol cars still constitute some 20-30 % of total sales, so saying that petrol's are hard to move will be a bit of over statement IMO . |
If i am a shareholder of Maruti, why should i be OK with Maruti absorbing the cost increase and not passing it on to the consumer IF he is willing to pay for it ? Anyway Maruti has lost a lot of money this year due to strike, they wont be willing to absorb any cost. As far as other models are concerned, Swift is the model where consumers would be most willing to pay more.
Alto - Under pressure from Eon, cant raise price
Estilo/Wagon R - No diesel model, cant increase price beyond an extent
Ritz - Limited market appeal, even when its available off-shelf and Swift has a 12 month waiting, people prefer Swift. Cant increase price beyond an extent
SX4 - Already laggard and value is its playing card Quote:
Originally Posted by .sushilkumar About what cost you are talking about here. what ever cost they are incurring on diesel is recovered by selling that along with some profit . what about those extra 4K which were never spend by MSIL in first place as they are assuming that it will used to make a petrol car which per se you is not selling. so in the end MSIL is earning a handsome 4 K pure profit if we assume your cost model above. |
I assumed 6k each. Lets assume cost increases by x each on Diesel & Petrol with a split of 20-80 for Petrol iesel. Considering the fact that petrol price rise is not feasible, Maruti would have to increase the price of diesel by 1.25x And keep in mind this is assuming people dont withdraw booking of diesel cars due to 10k increase. (I think this will be the case). So net net Maruti doesnt lose any money. Quote:
Originally Posted by .sushilkumar that;s what i have said , Above " Make Hay while Sun shines " And as for as above in bold goes than those are not fair business practice my friend .Market does n;t work that way. For long term gains , you need to loose some time in short term and legally also anybody can drag MSIL to CCI . it;s just that people are not well informed . try doing this in a Mature market and you will be sued in court legally. |
Drag Maruti why ? Maruti does not dominate market with >80% market share anymore. So its not a monopoly. And everyone has freedom to price their products with margin they think is fine, the customers will give their verdict by buying it if they think its still worth it. Simple rule of demand and supply. BTW give me an example where a price increase of ~1.4% (10k/6L) in a mature market or otherwise led to company being sued ? If this was the case, no company would have ever been able to raise prices. BTW your logic of both Swift's being same hence legally price rise on one not possible - FALSE. Swift Petrol and Swift Diesel are two different products. Company is willing to price them as they wish seperately.
Last edited by ethanhunt123 : 18th November 2011 at 23:06.
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