On the sidelines of India Economic Summit in New Delhi, Mahindra & Mahindra (M&M), on 8th November’09, has that it may increase the prices of its products, if the input costs jump up continuously. A senior representative of the company has claimed that steel prices gained as much as 33 per cent while rubber prices rose 29 per cent last quarter.
"Yes, price increase could happen if commodity prices go up further," M&M President (Automotive Sector) Pawan Goenka told reporters on the sidelines of India Economic Summit here. He, however, declined to give any time-frame for the revision of vehicle prices. Goenka said: “It could happen. We review these inputs constantly. There has been an increase in steel prices, tyre prices. If these prices remain okay, then we are fine.”
When queried about the sales expectation for this fiscal, Goenka said, “October has been the best month in passenger cars, which saw 30 per cent growth. For M&M, the UV (utility vehicle) segment saw a 32 per cent increase. Based on that, we may post a double-digit growth during this financial year.”
Even though Renault India spokesperson has reaffirmed its parent company's investment plans for the country, media reports have repeatedly claimed that is a possibility that the Indian arm of the French automaker may toy with the idea of jointly manufacturing with Mahindra and Mahindra (M&M) more models besides Logan. Even though Renault India has refused to disclose the names of proposed models, it is widely believed that it may jointly manufacture with M&M its 5-door hatchback-Sandero-from Nashik in Maharashtra, where the combine is already manufacturing its entry-level sedan-Logan. If media reports are to be believed, the medium size hatchback would be available in both petrol and diesel versions and sources said the engines would be finetuned in a way to attract lower excise duties. The car might also cater to the overseas right-hand drive markets.
According to auto industry sources, “Mahindra-Renault’s Nashik plant is under-utilised as the sales target for Logan has been below its expectations. So, Renault Motors may explore the feasibility of rolling out a couple of new models from the plant during this year in order to have better utilisation of the capacity.”
Goenka said, “We are in discussions with Renault, but I can’t confirm anything right now.” When asked about reports claiming friction between Renault and M&M in the Logan joint venture, Goenka denied that his firm had held any talks with its overseas partner on the issue. However, he expressed his concern about Logan’s poor performance and said, "Low volumes are a concern if we consider a single product (Logan). But overall if we see our total portfolio we are okay with it," Pawan Goenka, president automotive sector Mahindra & Mahindra said at the sidelines of the India Economic Summit 2009.
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