The company had previously implemented similar price increases in early July 2023 and early October 2023, also attributing those hikes to escalating input costs.
24 Jun 2024 | 2154 Views | By Autocar Professional Bureau
Hero MotoCorp, India's largest two-wheeler manufacturer, has announced plans to increase prices of select motorcycles and scooters effective July 1, 2024. The company cited rising input costs as the primary reason for the price hike, which will see an increase of up to Rs. 1,500 depending on the specific model ...
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Hero MotoCorp, India's largest two-wheeler manufacturer, has announced plans to increase prices of select motorcycles and scooters effective July 1, 2024. The company cited rising input costs as the primary reason for the price hike, which will see an increase of up to Rs. 1,500 depending on the specific model and market.
This marks the third price revision by Hero MotoCorp in the past year. The company had previously implemented similar price increases in early July 2023 and early October 2023, also attributing those hikes to escalating input costs.
The automotive industry has been grappling with significant increases in raw material prices, particularly metals, since 2023. Steel prices saw a sharp uptick in 2023, driven by supply constraints and increased demand as economies recovered from the pandemic. Nickel, a crucial component in battery production for electric vehicles, also experienced price volatility, hitting multi-year highs in early 2024 due to geopolitical tensions and supply chain disruptions.
These metal price hikes have put pressure on manufacturers across the automotive sector, forcing many to pass on costs to consumers. Hero MotoCorp's repeated price revisions reflect the ongoing challenge of managing these increased input costs while maintaining competitiveness in the market.
The latest price adjustment comes at a time when Hero MotoCorp has been experiencing a resurgence in demand. After facing a prolonged period of weak sales from the second half of 2022 through most of 2023, the company has seen a turnaround in consumer interest since late 2023.
Industry analysts attribute this recovery to a combination of factors, including improved economic conditions, pent-up demand, and the company's strategic product launches. The rebound is particularly significant given the challenges Hero MotoCorp faced during the extended sales slump, which was largely influenced by the economic impact of the COVID-19 pandemic and subsequent supply chain disruptions.
Despite the recent uptick in sales, Hero MotoCorp continues to grapple with rising costs of raw materials and components. The company's decision to implement another price hike reflects the ongoing pressures faced by manufacturers in the automotive sector.
As Hero MotoCorp moves forward with this price revision, industry observers will be closely watching to see how it impacts the company's sales momentum and market share in India's highly competitive two-wheeler market. The ability to balance cost pressures with consumer demand will be crucial for maintaining growth in an environment of volatile raw material prices.
Metal prices have been rising driven by several key factors, including supply chain disruptions, increased demand, and geopolitical tensions. The demand for metals such as aluminum, copper, and steel surged as global economies recovered post-pandemic, leading to heightened industrial activity and infrastructure projects.
Supply chain issues, particularly in mining and transportation, exacerbated the situation. For example, disruptions in major mining regions and logistical bottlenecks have constrained the supply of essential raw materials, pushing prices upward. Additionally, energy costs have soared, significantly impacting the metal production industry, which is heavily reliant on energy-intensive processes.
Geopolitical tensions, particularly between major powers, have also played a role. Sanctions and trade restrictions have affected the global flow of raw materials, further tightening supply and increasing costs. Environmental regulations and the push for greener technologies have spurred demand for metals like lithium and cobalt, crucial for electric vehicles and renewable energy storage, contributing to price increases.