Mahindra hints at steep hike in car prices in 2020

Cost of upgrading models for new safety and emission norms will drive up prices, says Mahindra MD Pawan Goenka.

Published On Aug 08, 2018 04:30:00 PM

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Mahindra hints at steep hike in car prices in 2020

Mahindra & Mahindra MD Goenka said some low-volume models will not be upgraded to meet upcoming safety, emission norms. There will be no impact on models like the KUV100, Scorpio and XUV500.

Passenger vehicles could see a big price hike in the days to come, Pawan Goenka, MD, Mahindra & Mahindra hinted at a press meet in Mumbai. The price increases will be on account of the upgrades required to meet India’s latest crash test and emission norms.

Car buyers will have to brace for some cost implications as carmakers will upgrade their older models to meet safety norms. The more stringent crash test norms came into effect from October 1, 2017, for new cars and will apply to all cars on sale in the country from October 1, 2019.

Additionally, expenses will also come from upgrading cars to meet the BS-VI emission norms that will come into force from April 2020. The cost of migrating to BS-VI emission norms will be higher for diesel cars as opposed to petrol vehicles as the former will have to be fitted with diesel particulate filters and selective catalytic converters. This could significantly impact carmakers, like Mahindra & Mahindra, which have a diesel-heavy portfolio. According to some estimates, diesel car prices could potentially go up by more than Rs 1 lakh in 2020.

Goenka said that the high costs involved in upgrading the models to meet the safety and fuel norms could also mark the end of the road for some low-volume models. However, he stressed that there will be no impact on in-demand models such as the Scorpio and the XUV500.

"When it comes to BS-VI norms, since there is a lot of investment required, there will be a corresponding price increase that might happen along with a price increase due to the safety norms. Hence, we are taking a decision on which models we may decide to not continue beyond March 2020," Goenka said. "Nearly all our models, with the exception of one or two low-volume products, will meet the new safety norms," he added.

The Verito sedan could be discontinued, and there's a question mark around the NuvoSport as well, as Mahindra hasn't produced or sold a single unit of the SUV since April 2018.

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