Tata Motors Raises Prices of Passenger Vehicles Due to Regulatory Changes and Rising Input Costs

Tata Motors has decided to raise the prices of its passenger vehicles due to increasing input costs and regulatory changes, which have made car production more expensive. This marks the second time the Indian automaker has increased its prices in 2023. The price hike will result in a weighted average increase of 0.6 percent, varying by model and variant. The new prices will come into effect from May 1, following an earlier 1.2 percent price hike in January for the same reasons.

Moreover, the implementation of Bharat Stage VI norms at the beginning of April has led to a rise in vehicle costs across all segments in India. Automakers are now required to equip their vehicles with an emissions monitoring device, which has led to additional expenses. This, along with the increasing input costs and regulatory changes, has forced companies such as Tata Motors to increase the prices of their passenger vehicles.

Despite the multiple price hikes throughout the year, India has recorded its highest-ever sales of passenger cars in the fiscal year that ended on March 31, 2023. This surge in sales was largely driven by the demand for larger and more expensive sports utility vehicles (SUVs), with Tata Motors’ Nexon and Punch SUVs among the top-selling cars in India in 2022.

However, the Federation of Automobile Dealers Associations (FADA) predicts that auto sales growth in India will slow down to a low single-digit percentage in the current fiscal year due to inflation, recent price hikes by automakers, and regulatory changes. This is in contrast to the previous fiscal year, which saw high sales figures, primarily due to strong demand for larger SUVs like Tata Motors’ Nexon and Punch models.