Tata Motors announces 3% price hike, shares rise despite sluggish market
The share price of Tata Motors Limited gained over 1% trading at ₹810 on December 10, following the company’s announcement of a price hike for all its vehicles, including the electric vehicles lineup. The hike, expected to begin in January 2025 is intended to help address the increasing costs of inputs and inflationary pressures.
Moreover, this latest hike is Tata Motors’ third price hike for this year and has been attributed to a growing commodity price internationally, high import duties on raw materials and ongoing supply chain issues.
Nexon and Punch Prices to Increase
The price hike will affect Tata’s popular passenger vehicles, the Nexon and the Punch, by Tata Motors, and are set to see higher price tags. Currently, priced at ₹8.00 lakh and ₹6.13 lakh (ex-showroom), respectively, the base models might cost up to ₹8.24 lakh and ₹6.31 lakh post-hike.
The company stated that the 3% increase would apply across its automobile lineup, pointing to its strategy to cushion the effects of rising production costs. The move is well timed as after several years of high demand, the automotive industry in India is now seeing growth.
Industry-Wide Price Hikes
Tata Motors’ hike comes as part of a price increase trend by automakers around the world. Recently, Maruti Suzuki, India’s largest car manufacturer, announced a price hike of 4% on all its vehicles starting January 2025. Likewise, Hyundai Motor India plans to revise all model prices by ₹25,000 starting on January 1, 2025, including popular models like Venue, Creta, and the Ioniq 5 EV. Hyundai is also planning to introduce the Creta EV early next year to boost its EV segment.
Luxury automakers like Mini, Audi, BMW, as well as Mercedes-Benz have also announced price hikes for the new year, citing the same reasons for rising manufacturing and logistics costs.
Comparing the Performance of Stock and Market Condition
While the market rewarded the price hike announcement by appreciating Tata Motors’ shares, the company continues to lag in the four-wheeler OEM sector. In the last three months, the stock of the company has depreciated by more than 22%.
Around 10 am on December 10, Tata Motors was trading at ₹807, reflecting a 1.13% rise from the previous closing on NSE.
The price hike move comes as automakers continue to struggle with inflation and high input costs, forcing companies to transfer the burden to the customers. However, with several automakers adjusting their prices, customers should buckle up for raise vehicle prices for the next year.